MiLOC Group Limited - Interims for the six months ended 30 June 2020

CRUSHMETRIC

30/09/2020 09:50

RNS Number : 5891A

MiLOC Group Limited

30 September 2020

 

30 September 2020

 

 

MiLOC Group Limited

("MiLOC", the "Group" or the "Company")

 

Interim results for the six months ended 30 June 2020

 

 

Chief Executive Officer's Statement

 

MiLOC Group Limited (NEX: ML.P), the pharmaceutical and healthcare group announces the results of the Company and its subsidiaries for the six month period ended 30 June 2020.

 

The nature of the Company's operations and its principal activities are to act as the holding company of a group engaged in

(i)         the provision of healthcare services, through and assisted by Traditional Chinese Medicine ("TCM") and medical products;

(ii)        therapies and consultations through a network of clinics in Hong Kong; and

(iii)       the sale and distribution of TCM healthcare and skincare products through wholesale outlets and TCM clinics, the Group's retail store in Hong Kong and other non-related TCM retail outlets, as well as directly to customers through the Company's online store.

 

With the support of various celebrities, the Group continued to invest time and effort on sales and distribution of its TCM Fast-Moving Consumer Goods ("FMCG") which includes skin-care, hair-care and body-care products, through both online and offline channels.

 

 

This announcement contains inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is disclosed in accordance with the Company's obligations under Article 17 of those Regulations.

 

COVID-19

 

The outbreak of COVID-19 creates a new and highly unpredictable challenge. We have tested our business continuity plans which have been successfully activated.

 

The investment in online platforms for selling our products over recent years has resulted in the business being well placed to continue delivering services to our clients without disruption and with no increase in operational risk.

 

Management do not consider it possible to quantify the true impact of COVID-19 on the business at this time but remain confident that the business can adjust to the challenges it presents.

 

Financial highlights

 

·  Revenue for the six months ended 30 June 2020: HK$14,422,154 (30 June 2019: HK$6,101,387)

· Gross profit for the six months ended 30 June 2020: HK$5,117,865 (30 June 2019: HK$2,254,680)

·  Loss for the six months ended 30 June 2020: HK$14,363,177 (30 June 2019: HK$19,443,750)

· The basic and diluted loss per share for the six months ended 30 June 2020: HK$0.18 (30 June 2019: HK$0.24)

·  The Group's cash position as at 30 June 2020: HK$(247,254) (30 June 2019: HK$420,835)

 

 

Review of significant activities

 

The Group has, over the last few years, invested considerable time and expense in establishing itself and introducing the concept of TCM, and TCM medical products and healthcare to the wider public. The Board believes that the establishment of TCM products will make a very substantial positive contribution to the Group's revenue in the long term.

 

(a)  Private Placings

In January and February 2020, the Company entered into placing agreements with five individual shareholders to issue 314,416 new US$0.001 ordinary shares at a placing price of 28.5p per share to raise approximately HK$919,668. The placing and allotment are completed on 24 February 2020.

 

(b)  Convertible Bond

On 19 January 2020, the Company entered into an extension agreement for the Convertible Bond. The maturity date extended to 19 July 2021 and the coupon rate adjusted to seven percent (7%) per annum for the period from 20 January 2020 to 19 October 2020 and seven point five percent (7.5%) per annum for the period from 20 October 2020 to 19 July 2021. All other terms remain unchanged.

 

Financial review

 

(i) Income statement items

 

The Group's revenue for the six months ended 30 June 2020 amounted to HK$14,422,154, an increase of HK$8,320,767 or 136.4% as compared to the six months ended 30 June 2019. This was attributable to increased revenue generated from sale of healthcare product by approximately HK$4,490,000. The Group's gross profits and gross profit margin for the six months ended 30 June 2020 amounted to HK$5,117,865 and 35.49% (30 June 2019: HK$2,254,680 and 36.95%) respectively. The Group's other revenue from management fee income for the six months ended 30 June 2020 amounted to HK$120,000, a decrease of 6.96% as compared to the six months ended 30 June 2019. 

 

The Group's distribution costs for the six months ended 30 June 2020 amounted to HK$13,793,151, an increase of HK$177,587 or 1.3% as compared to the same period in 2019. The Group's administrative expenses for the six months ended 30 June 2020 amounted to HK$7,146,401, a decrease of HK$845,533 or 10.58% as compared to the six months ended 30 June 2019. This was due to less travelling expenses and legal and professional fee occurred.

 

The Finance Costs for the six months ended 30 June 2020 amounted to HK$156,342, this was related to the interest paid for the convertible bond.

 

The unaudited net loss for the period ended 30 June 2020 shows a decrease of HK$5,080,573 and 26.13% compared to the same period in 2019. This was attributable to the increase of sale by the Group during the period.

 

The Directors do not recommend the payment of a dividend in respect of the period.

 

The interim results have not been reviewed by the Company's auditor.

 

 

(ii) Balance sheet items

 

The Group's tangible fixed assets mainly comprised of leasehold improvements and office equipment, decreased in amount by HK$332,363 as at 30 June 2020, compared to the same period in 2019, mainly due to the depreciation for leasehold improvement and office equipment.

 

The Group's inventories as at 30 June 2020 amounted to HK$7,410,835 with an increase of HK$3,734,032 over the balance as at 30 June 2019. This was mainly due to the Company's purchase of AKFS Plus haircare products and KooCool Plus bodycare product and biscuits during the year.

 

The Group's other receivables and prepayments as at 30 June 2020 increased by HK$1,330,287 or 55.42% compared to the same period in 2019. This was due to the partial of Royalty fee paid by a subsidiary.

 

The Group's trade payables as at 30 June 2020 amounted to HK$8,228,126 with an increase of HK$7,056,998 over the balance as at 30 June 2019, this was mainly due to less settlement to the vendor for the period.

 

The Group's cash and cash equivalents decreased by HK$668,089 as at 30 June 2020 compared to 30 June 2019.

 

 

Outlook

 

Like many other companies around the world, the Covid-19 pandemic has affected our business with great challenges. We have used this pandemic period as an opportunity to provide more healthcare services and focus on wholesale and distribution of the medical supplies to our customers in local community and over the world.

 

The outbreak of COVID-19 has changed the commercial world, with the duration and ultimate impact of the virus not yet known. Our objective is to protect our staff and business, and to ensure we are well placed to resume normal operations if further lockdowns are imposed by the Governments of the cities where we operate and potentially capitalise on opportunities when the virus impact subsides.

 

Although it is a challenging year, the Group will continue to make sure that sufficient working capital is maintained.

 

On behalf of the Board of Directors, I would like to thank our management and staff for the great loyalty and dedication they continue to show through these delicate times. I would also like to extend our utmost appreciation to all our partners, shareholders, customers, business associates and suppliers, for their continued support.

 

The Directors of the Company accept responsibility for the contents of this announcement.

 

Chow Ching Fung

Chairman

 

For further information, please contact:-

 

MiLOC
ONG Ban Poh Michael - Chief Executive Officer
CHOI Ronnie - Chief Financial Officer
Tel: +852 2110 4221
AQSE Growth Market Corporate Adviser
PETERHOUSE CAPITAL LIMITED
Guy Miller
Mark Anwyl
Tel: +44 (0)20 7469 0930

 

MiLOC Group Limited

Consolidated Statement of Comprehensive Income

For the six months ended 30 June 2020

 

The Group
Unaudited
Unaudited
Audited
6 months ended 30 June 2020
6 months ended 30 June 2019
Year ended 31 December 2019
HK$
HK$
HK$
From continuing operations
Revenue
14,422,154
6,101,387
15,439,675
Cost of sales
(9,304,289)
(3,846,707)
(10,197,017)
Gross profit
5,117,865
2,254,680
5,242,658
Other revenue
1,897,119
128,983
266,213
Distribution costs
(13,793,151)
(13,615,564)
(28,952,543)
Administrative expenses
(7,146,401)
(7,991,934)
(16,422,397)
Foreign exchange gains/(losses), net
(282,525)
(18,852)
(36,735)
Operating loss
(14,207,093)
(19,242,687)
(39,902,804)
Impairment for intangible asset and goodwill
-
(46,127)
(46,127)
Loss on disposal of subsidiaries
-
-
(54,908)
Finance costs
(156,342)
(155,999)
(617,745)
Interest income
258
1,404
2,137
Loss before taxation
(14,363,177)
(19,443,409)
(40,619,447)
Taxation
-
(341)
-
Loss for the period/year
(14,363,177)
(19,443,750)
(40,619,447)
Other comprehensive income
Exchange differences arising from translation
16,988
39,610
20,060
Total comprehensive result for the period/year
(14,346,189)
(19,404,140)
(40,599,387)
Loss for the period/year attributable to:
Equity holders of the parent entity
(14,840,750)
(18,264,646)
(37,707,213)
Non-controlling interests
477,573
(1,139,494)
(2,912,234)
(14,363,177)
(19,404,140)
(40,619,447)
Total comprehensive loss for the period/year attributable to:
Equity holders of the parent entity
(14,823,762)
(18,264,646)
(37,687,153)
Non-controlling interests
477,573
(1,139,494)
(2,912,234)
(14,346,189)
(19,404,140)
(40,599,387)
Loss per share -from continuing operations (HK$)
Basic and diluted
(0.18)
(0.24)
(0.47)


Loss per share - from continuing operations

 

The calculation of basic loss per share is based on the consolidated loss attributable to the equity holders of the parent entity of HK$14,840,050 (For the six months ended 30 June 2019: Loss of HK$18,287,224; For the 12 months ended 31 December 2019: Loss of HK$37,707,213) and the weighted average number of ordinary shares of 84,137,136 (For the six months ended 30 June 2019 weighted average number of ordinary shares of 76,983,235; For the 12 months ended 31 December 2019: 79,569,531) in issue during the period.

 

 

 

 

 

MiLOC Group Limited

Consolidated Statement of Financial Position

As at 30 June 2020

Unaudited
As at 30 June 2020
Unaudited
As at 30 June 2019
Audited
As at 31
December
2019
HK$
HK$
HK$
Assets
Non-current assets
Fixed assets
499,034
831,397
662,786
Other intangible assets
3,392,857
3,750,000
3,571,428
Right-of-use assets
4,243,608
-
5,994,333
8,135,499
4,581,397
10,228,547
Current assets
Inventories
7,410,835
3,676,803
7,897,946
Trade receivables
3,440,824
68,835
674,640
Other receivables and prepayments
3,730,739
2,400,451
5,111,688
Cash and cash equivalents
(247,254)
420,835
86,975
14,335,144
6,566,924
13,771,249
Total assets
22,470,643
11,148,321
23,999,796
Equity and liabilities
Equity
Share capital
655,387
607,897
652,935
Share premium
92,315,641
75,032,174
91,398,425
Reserve
(155,033,258)
(120,882,953)
(140,209,496)
Equity attributable to the parent entity
(62,062,230)
(45,242,882)
(48,158,136)
Non-controlling interest
7,384,389
8,679,556
6,906,816
Total equity
(54,677,841)
(36,563,326)
(41,251,320)
Liabilities
Current liabilities
Trade payables
8,228,126
1,171,128
8,675,949
Other payables and accruals
56,966,299
39,207,182
43,113,698
Amount due to directors
2,393,944
2,101,056
2,101,056
Lease liabilities
4,430,284
-
3,390,381
Borrowings
5,129,831
5,232,281
5,452,172
77,148,484
47,711,647
62,733,256
Non-current liabilities
Lease liabilities
-
-
2,517,860
Total liabilities
77,148,484
47,711,647
65,251,116
Total equity and liabilities
22,470,643
11,148,321
23,999,796


The Group's consolidated financial statements for the six months ended 30 June 2019 and 2020 disclosed above have neither been audited nor reviewed by the Company's auditors.

 

The same accounting policies and methods of computation as included in the Group's consolidated financial statements for the year ended 31 December 2019 have been adopted in the preparation of the Group's unaudited consolidated financial statements for the six months ended 30 June 2020.

 

 

 

 

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