TIDMMEDI
RNS Number : 1258S
Medilink-Global UK Limited
19 September 2014
19 September 2014
MediLink-Global UK Limited
("MediLink" or the "Company" or the "Group")
HALF-YEARLY REPORT for the six months to 30 june 2014
MediLink, the provider of electronic health-card network
services to insurance companies and corporate organisations to
facilitate administration of medical claims and healthcare
data-management, announces its interim results for the six months
ended 30 June 2014.
Financial highlights
-- Operating loss reduced by 20% to GBP188,000 (H1 2013: GBP235,000);
-- Revenue has decreased marginally by 2.84% to GBP1,062,000 (H1 2013: GBP1,093,000);
-- Revenue from the Group's Singapore and China operations
increased by 6.52% to GBP294,000 (H1 2013: GBP276,000) and 15.43%
to GBP374,000 (H1 2013: GBP324,000), respectively; and
-- Improvement in operating performance was attributable to
revenue growth in both China and Singapore as well as continued
cost-saving measures in the Group's operations in Malaysia.
Operational highlights
Malaysia and Singapore
On 1 March 2014, MedilinkGlobal (M) Sdn Bhd ("Medilink
Malaysia") renewed its Managed Care System maintenance contract
with Great Eastern Life Assurance Berhad for one year. It will be
renewed automatically for another year upon its expiry on 29
February 2015.
AIA Co., Ltd
- American International Assurance Berhad ("AIA") has operated
under a single license in Malaysia since June 2013, after acquiring
ING Group's local insurance operations.
- Malaysia's leading life-insurer AIA has successfully
integrated its Takaful companies AIA AFG Takaful Bhd. and AIA
PUBLIC Takaful Bhd. (formerly known as ING PUBLIC Takaful Ehsan
Berhad). Since 1 March 2014, the businesses have operated under a
single licence and brand, AIA PUBLIC Takaful Bhd ("AIA PUBLIC").
AIA PUBLIC is jointly-owned by AIA Co. Ltd. (AIA), Public Bank
Berhad and Public Islamic Bank Berhad.
- The Directors of MediLink are confident that there will be a
significant positive effect for Medilink Malaysia following the
integration of AIA and ING Group's local insurance operators, both
in the areas of the Group's Third Party Administration ("TPA")
services as well as system development and enhancement. This is
reflected by the significant increase of 57,649 members since the
close of December 2013.
Self-funded and government-linked employers markets
Medilink Malaysia continues its efforts in making inroads into
the self-funded and government-linked employers markets . During
the period under review, the Company secured a strategic corporate
account, The Royal Malaysian Police Cooperative Limited, which has
contributed a further 17,600 members to Medilink Malaysia's
business.
Great Eastern Life Assurance Co. Ltd ("GE Singapore")
Medilink-Global (Asia) Pte Ltd has completed the six-month
user-requirement and system-specification studies to the
satisfaction of GE Singapore The Company has received a letter of
intent to proceed with the second phase of a system-licensing
project designed to enhance, develop, customise and license the
Managed Care System it has written for GE Singapore. The expected
timing of project completion and system deployment is early July
2015.
The Directors are confident and strongly believe that there is
market demand for the Company's Managed Care System.
MedilinkGlobal (M) Sdn Bhd reaches ISO 9001:2008
Certification
The Directors of MediLink are proud to announce that Medilink
Malaysia has achieved ISO 9001:2008 certification through the
International Certification Services. This achievement is an
important milestone for the Group, bringing us a step closer to our
corporate goals. Through a process of continuous improvement, we
aim to deliver high-quality products and services to our clients.
The certification is being renewed for another year to 9 May
2015.
People's Republic of China ("China")
Medilink (Beijing) TPA Co., Ltd ("Medilink China"), a
wholly-owned subsidiary of MediLink, during the six-month period,
continues to secure and renew TPA service contracts with reputable
and established insurers in China.
- During the period under review, Medilink China renewed its
contract with Ping An Annuity Insurance Company Limited, Guangzhu
Branch; for a three year period to 18 April 2017. The contract will
be renewed automatically for another three years upon expiry.
- In line with the corporate strategy, as well as to satisfy
market demand, Medilink China is now offering healthcare management
services to large employers and insurance companies in China. It
has secured four healthcare management service contracts with the
following customers (listed below), contributing towards a total
membership of 6000 as of 30 June 2014.
-- TOTAL Petrochemicals Trade (China) Co., Ltd. Shanghai Branch
(1 January 2014 to 31 December 2014)
-- Everbright Bank Credit Card Center (1 January 2014 to 31
December 2014)
-- China United Property Insurance Company, Shanghai Branch (2
December 2013 to 1 December 2014)
-- Generali China Life Insurance Company Limited (1 December
2013 to 31 December 2023)
-- Generali China Life Insurance Company Limited, Shanghai
Branch (11 October 2013 to 31 July 2017)
In view of the favourable responses received from existing
customers to date, the Directors believe that healthcare management
services will increase membership levels in Medilink China.
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 2014,
which show an encouraging trend of improved operating performance
compared with the respective period for the six months ended 30
June 2013.
FINANCIAL REVIEW
The Group recorded marginally reduced revenues of GBP1,062,000
(H1 2013: GBP1,093,000) and a reduced loss-after-tax of GBP200,000
(H1 2013: GBP237,000) for the six months ended 30 June 2014.
Marginal reduction in Group revenues by 2.84% relative to the
same period last year, but revenue growth from Singapore and China
of 6.52% and 15.43%, respectively. The Malaysia and China operating
entities made the largest contribution to the Group's revenues
during the period under review, representing 37.10% (H1 2013: 45%)
and 35.21% (H1 2013: 30%) respectively, while Singapore contributed
27.68% (H1 2013: 25%).
The operating loss for the period was lower compared to the same
period last year by virtue of revenue growth in Singapore and China
and the cost-saving measures taken particularly in relation to
operations in Malaysia.
PERIOD IN FOCUS
There was a marginal increase in revenue from China during the
six months to 30 June 2014 relative to the same period in 2013,
rising from GBP324,000 in the first half of 2013 to GBP374,000 in
2014, representing year-on-year growth of 15.43% growth. The number
of enrolled members in China as at the end of August 2014 was
approximately 21,500 (1 August 2013: 19,500) while the number of
contracted insurance companies stands at 30 compared to 29 at the
same stage last year. The number of healthcare providers operating
in our network in China now stands at 549 (380 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 reduce operating loss in China by
approximately 46% in the first half of 2014 compared with the first
half of 2013. Management does not anticipate a significant increase
in operating costs in the second half of 2014.
Medilink Malaysia registered a 29% drop in its TPA revenue as a
result of the discontinuation of the TPA contract with AXA Affin
Insurance. This loss in revenues is gradually being replaced by new
business coming in from self-funded corporates, other insurers and
the licensing of MediLink's Claims Management System. Despite the
drop in revenue during the year, Medilink Malaysia registered a
profit-after-tax of GBP17,913 (H1 2013: GBP11,618 loss) due to the
significant decrease in costs to GBP405,257 (H1 2013: GBP512,198).
Management does not anticipate a significant increase in operating
costs in the second half of 2014.
Medilink-Global (Asia) Pte Ltd entered into a Share Sale
Agreement with SelfDoctor (Beijing) Technology Co., Ltd
("SelfDoctor"), on 31 July 2014 to divest a 51% interest in its
subsidiary, Medilink (Beijing) TPA Services Co., Ltd ("Medilink
China"). The Company retains a 49% interest in Medilink China.
Medilink China is currently loss making and the Directors of
MediLink believe that having a local partner could add strategic
value to the business. For the year ended 31 December 2013 Medilink
China had a turnover of CNY 7.29 million (c. GBP700,000) and
recorded a net loss of CNY 1.59 million (c. GBP150,000). Under the
terms of the Sale and Purchase Agreement entered into between the
Company and SelfDoctor, SelfDoctor has undertaken to provide
financial support to Medilink China of an amount not less than
US$1,000,000 (c. GBP613,600) and up to US$2,000,000 (c.
GBP1,227,300). This funding is intended for use as working capital
to expand Medilink China's business activities.
The Directors believe that entering into this strategic
partnership with SelfDoctor will give the Company the greatest
opportunity to realise value from our China operations. The
presence of a local Chinese partner will give Medilink China a
strategic advantage in seeking new opportunities in the Chinese
market.
PROSPECTS
We believe there will be steady improvement in revenue generated
from membership growth in both our Malaysia and China operations,
which together with the new revenues derived from the licensing of
MediLink's Managed Care System to insurance companies in Malaysia
and Singapore will contribute to a significant health insurance
portfolio. The Directors believe that these developments can only
enhance business prospects and are confident that the Group's
financial performance should continue to improve in the second half
of 2014 and during the financial years thereafter.
Norman Lott
Chairman
Consolidated Statement of Comprehensive Income
Six-month period ended 30 June 2014
Period Period Year
Ended Ended Ended
30.06.14 30.06.13 31.12.13
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'000
Revenue 5 1,062 1,093 2,069
Cost of sales (497) (598) (1,258)
Gross profit 565 495 811
Other income / (expense) 1 3 16
Administrative expenses (754) (733) (1,474)
Operating loss (188) (235) (647)
Finance expenses (12) (2) (27)
Loss before taxation (200) (237) (674)
Taxation 4 - - (4)
Loss after taxation and
for the period (200) (237) (678)
=================== ========== ==========
Other Comprehensive loss
Exchange differences on translating
foreign operations 57 (115) 132
------------------- ---------- ----------
Total comprehensive loss for the period
net of tax (143) (352) (546)
Loss for the year attributable to:
Owner of the Company (199) - (676)
Non-controlling (1) - (2)
(200) (352) (678)
------------------- ---------- ----------
Total comprehensive loss attributable to: attributable to:
Owner of the Company (142) - (544)
Non-controlling (1) - (2)
------------------- ---------- ----------
(143) (352) (546)
------------------- ---------- ----------
Loss per share (pence)
Basic 2 (0.17) (0.20) (0.56)
Diluted* 2 (0.17) (0.20) (0.56)
* 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 2014
30.06.14 30.06.13 31.12.13
Note Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
ASSETS
Non-current assets
Intangible assets 3,134 3,181 3,140
Property, plant and equipment 178 185 163
Total non-current assets 3,312 3,366 3,303
Current assets
Trade and other receivables 1,959 1,547 1,107
Cash and cash equivalents 440 615 304
Total current assets 2,399 2,162 1,411
TOTAL ASSETS 5,711 5,528 4,714
========== ========== =========
EQUITY
Capital and Reserves
Share capital 6 6,045 6,045 6,045
Share premium account 6 1,507 1,507 1,507
Reserves (5,618) (5,342) (5,473)
---------- ---------- ---------
Total shareholders' equity 1,934 2,210 2,079
Non-controlling interests (3) (2)
---------- ---------- ---------
Total equity interest 1,931 2,210 2,077
---------- ---------- ---------
Current liabilities 3,284 2,961 2,118
Total current liabilities 3,284 2,961 2,118
-------- -------- -------------
Non-current liabilities
Other payables 452 313 475
Deferred tax liabilities 44 44 44
Total non-current liabilities 496 357 519
-------- -------- -------------
TOTAL EQUITY AND LIABILITIES 5,711 5,528 4,714
======== ======== =============
Consolidated Statement of Cash Flows
Six months ended 30 June 2014
30.06.14 30.06.13 31.12.13
Unaudited Unaudited Audited
GBP'000 GBP'000 GBP'000
Cash flows from operating activities
Loss before taxation (200) (237) (674)
Adjustments for:
Amortisation of intangible assets 7 23 52
Depreciation of property, plant and
equipment 45 87 126
Gain on disposal of property, plant
and equipment - - 1
Disposal of a non controlling interest 61
Finance costs 12 2 27
Cash from operating activities before
changes in working capital (136) (125) (407)
(Increase)/decrease in trade and other
receivables (852) (12) 510
Increase in trade and other payables 1,156 845 55
---------
Cash flows from operations 168 708 158
Interest paid - - (3)
Net cash used in operations 168 708 155
Investing activities
Purchase of property, plant and equipment (63) (151) (180)
Net cash used in investing activities 105 (151 (180)
---------
Financing activities
Term loan - - 150
Repayment of hire purchase liabilities (2) (2) (4)
Net cash (used in)/generated by financing
activities (2) (2) 146
Net increase/in cash and cash equivalents 103 555 121
Effect of exchange rate changes 33 (136) (13)
Cash and cash equivalents at the beginning
of the period 304 196 196
Cash and cash equivalents at the end
of the period 440 615 304
========== ========== =========
Notes to the interim financial information
Six-month period ended 30 June 2014
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 2014 and are consistent with those disclosed in the
group's Report and Financial Statements for the year ended 31
December 2013.
The interim results have not been reviewed nor audited by the
Company's auditor. The comparatives for the year ended 31 December
2013 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 auditor's 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 19
September 2014
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
30.06.14 30.06.13 31.12.13
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (audited)
Loss after taxation (201) (237) (678)
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) (0.17) (0.20) (0.56)
------------- ------------- ------------
Diluted loss per share (pence) (0.17) (0.20) (0.56)
------------- ------------- ------------
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
2014.
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.
30 June 2014 (unaudited) Third party Software
administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 1,028 34 - 1,062
Internal revenue - 30 (30) -
Total revenue 1,028 64 (30) 1,062
-------------- ----------- -------------------- --------
Interest revenue - - - -
Depreciation and amortisation (45) - - (45)
Corporation tax - - - -
Earning before tax
(EBT) (200) - - (200)
Assets 6,571 189 (1,049) 5,711
Liabilities (6,609) (320) 3,150 (3,779)
-------------- ----------- -------------------- --------
(i) The assets of third party administrator include the goodwill
on consolidation of GBP3,038,000.
Revenues from major customers amounted to GBP541,229: AIA Bhd
(formerly known as ING Insurance Bhd) and the insured customers of
Medilink China (H1 2013: GBP450,449) and GBP367,589: self-insured
corporate clients (H1 2013: 325,179) arising from sales in the
third party administrator segment.
30 June 2013 (unaudited) Third party Software
administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 1,044 49 1,093
Internal revenue - 10 (10) -
-------------- ----------- ---------------- --------
Total revenue 1,044 59 (10) 1,093
-------------- ----------- ---------------- --------
Interest expenses - - - -
Depreciation and
amortisation (110) - - (110)
Corporation tax - - - -
Earning before tax
(EBT) (240) 3 - (237)
Assets 6,096 147 (1,115) 5,528
Liabilities (6,138) (296) 3,116 (3,318)
-------------- ----------- ---------------- --------
The assets of third party administrator include the goodwill on
consolidation of GBP3,038,000.
Third party Software
31 December 2013 (audited) administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'000
External revenue 2,047 22 - 2,069
Internal revenue 30 109 (139) -
-------------- ----------- ---------------- --------
Total revenue 2,077 131 (139) 2,069
-------------- ----------- ---------------- --------
Interest revenue - - - -
Interest expenses 5 - - 5
Depreciation and amortisation 177 1 - 178
Corporation tax - - 4 4
Earning before tax
(EBT) (742) 2 66 (674)
Assets 5,765 190 (1,240) 4,715
Liabilities (5,663) (323) 3,320 (2,666)
-------------- ----------- ---------------- --------
The assets of third party administrator are including the
goodwill on consolidation of GBP3,038,000.
Revenues from two customers amounted to GBP381,790: AIA Bhd
(formerly known as ING Insurance Bhd) GBP282,485 and AXA Insurance
Bhd GBP99,305, arising from sales by third party administrator
segment.
The geographical split of revenue and non-current assets arises
as follows:
30 June 2014 (unaudited) Jersey Singapore China Malaysia Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 294 374 394 1,062
Intangible assets - - - 96 96
Goodwill 3,038 - - - 3,038
PPE - - 45 133 178
-------- ------------------ ------- ----------- --------
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
-------- ------------------ ------- ----------- --------
31 Dec 2013 (audited) Jersey Singapore China Malaysia Total
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 508 753 808 2,069
Intangible assets - - - 102 102
Goodwill 3,038 - - - 3,038
PPE - - 40 123 163
-------- ------------------ ------- ----------- --------
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 2013 31 December
2014 2013
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 10.2842 10.4808
------------- ------------- ---------------
GBP1 : SGD 2.1079 2.1269
------------- ------------- ---------------
GBP1 : MYR 5.4573 5.4679
------------- ------------- ---------------
GBP1 : HKD 12.9800 13.1982
------------- ------------- ---------------
8 Post balance sheet event
The Board of Directors concluded a sale and purchase agreement
dated 31 July 2014 to divest a 51% shareholding of Medilink
(Beijing) TPA Services Co., Ltd to a local strategic Chinese
partner, Selfdoctor (Beijing) Technology Co., Ltd for strategic
reasons. Medilink continues to hold 49% of Medilink (Beijing) TPA
Services Co., Ltd following the completion of this sale.
With a local strategic participation and active involvement in
the company's ownership, 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
IR GIGDCLXBBGSC
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