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MEDI - Medilink Global UK News Story

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Sector
Healthcare
Size
Micro Cap
Market Cap £n/a
Enterprise Value £n/a
Revenue £1.78m
Position in Universe th / 1826

Medilink-Global UK - Half Yearly Report

Thu 1st October, 2015 7:00am
RNS Number : 8277A
Medilink-Global UK Limited
01 October 2015

1 October 2015

MediLink-Global UK Limited

("MediLink"or "theCompany")

HALF-YEARLY REPORTfor the six months to 30 june 2015

MediLink, the provider of electronic healthcard network services to insurance companies and corporateorganisationsto help them facilitate the administration of medical claims and healthcare data management, announces its interim results for the six months ended 30 June 2015.

Financial highlights

Revenue increased by 2.3% to 704,000 (H1 2014: 688,000);

Revenue contribution fromMalaysiaoperations increased by 4.6% to 412,000 (H1 2014: 394,000);

Operating loss for continuing operations reduced by 11% to 112,000 (H1 2014: 126,000); and

The marginal improvement in operating performance was attributable to revenue growth in Malaysia and continued cost saving measures within MediLink's operations.

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. Medilink Global (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 contracts with several clients including those detailed below:

TPA Services:

v January 2015: ERL Maintenance Support Sdn Bhd (E-MAS)

E-MAS, established in 1999 to commission, operate and maintain the Express Rail Link (ERL), Malaysia's fastest, and most intensive railway system.

Medilink Malaysia was appointed to provide TPA services, serving its 1100 employees and dependents

v January 2015: Global Educare Sdn Bhd

Medilink Malaysia was appointed to provide TPA services, serving its 500 employees

v June 2015: Tekun Nasional

Medilink Malaysia was appointed to provide TPA services, to Tekun Nasional, a Malaysian Government-Link Agency, serving its 3300 employees and dependents, for a period of 2 years, ending May 2017

v June 2015: MY E.G Services Berhad (MYEG)

MYEG, a concessionaire for Malaysian Electronic-Government ("E-Government") MSC Flagship Application, appointed Medilink Malaysia to provide TPA services to its 2000 employees and dependents

System and Network Infrastructure services:

In collaboration with Qualitas Medical Group Sdn Bhd, a Malaysian based primary healthcare provider group with operations in Malaysia and several countries in the Asia Pacific region, Medilink Malaysia licensed the use of its Claims Management system and front-end electronic healthcard network infrastructure, to facilitate on-line-real-time member's eligibility validation and submission of primary care claims.

Through this collaboration, an additional 12,000 members from a total of 58 employers newly acquired, were added to the Medilink service platform as of September 2015.

AIA Bhd (AIA) contributed an additional 63,000 members to the membership growth of Medilink Malaysia; during the period under review.

The Board of Directors' of MediLink are confident that there will be a continuous positive effect for Medilink Malaysia in the years to come.

Enquiries:

MediLink-Global UK Limited

Allenby Capital Limited

(Nominated Adviser and Broker)

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

The Board of MediLink is pleased to present theGroup's unaudited results for the six month period ended 30 June 2015, which show an encouraging trend in improved operating performance compared with the comparative period for the six months ended 30 June 2014.

FINANCIAL REVIEW

The Group recorded revenues of 708,000 (H1 2014: 688,000) and a reduced loss after tax of 112,000 (H1 2014: 126,000) for the six months ended 30 June 2015 for continuing operations

Growth in revenues increased marginally by 2.3% over the same period last year, with revenue from Malaysia growing by 4.56% and TPA income increasing by 6.4%. The Malaysian operating entities continued to make the largest contribution of 59% (H1 2014: 57%) of the Group's revenues for the period under review, whilst Singapore contributed 41% (H1 2014: 43%).

The operating loss for the period was lower compared to the same period last year as a result of revenue growth in Malaysia and the cost saving measures taken across all the subsidiaries of Medilink resulting in a 7% reduction in administrative costs. In addition the losses from Medilink China were marginally lower than the corresponding period in 2014

PERIOD IN FOCUS

The first half of 2015 witnessed another increase in revenue in Malaysia from 394,000 in the first half of last year to 412,000 for the six months to 30 June 2015, representing a 4.7% growth over the same period last year. The number of enrolled members in Malaysia as at the end of August 2015 was approximately 1,000,000 (1 September 2014 - 900,000) while the number of corporate clients contracted stands at 225 compared to 210 at the same stage last year. The number of healthcare providers operating in our network in Malaysia now stands at 1,500 (1480 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 increase the operating profit in Malaysia significantly, by approximately 90%, for the first half of 2015 compared with the first half of 2014. Management are not anticipating a significant increase in operating costs in the second half of 2015.

Further to the completion and deployment of the Claims Management System licensing to Great Eastern Life Assurance Co., Ltd on September 11, 2015, the Malaysia entity is currently finalizing an 18 months contract with an established Malaysian insurance company.

The operations in Singapore recorded a marginal decrease in revenues by 0.7% to 292,000 (2014: 294,000) compared with the same period last year.

On 1 August 2014, the Group entered into a Sales and Purchase Agreement with Selfdoctor (Beijing) Technology Co. Limited to divest 51% of its interest in Medilink (Beijing) TPA Services Co Limited. The divestment was fully completed on 10 July 2015 when the transfer of ownership took place. With a strategic local partner in place and with enhanced financial support it is believed this will add value to the China business and help expand Medilink China's business activities.

PROSPECTS

The revenues are expected to be stronger particularly with the impact of continued growth in TPA membership as well as system licensing in our Malaysia operations, the Directors are confident that the Group's financial performance should continue to improve in the second half of 2015 and during the financial years thereafter.

Norman Lott

Chairman



Consolidated Statement of Comprehensive Income

Six month period ended 30 June 2015



Period

Period

Year



Ended

30.06.15

Ended

30.06.14

Ended

31.12.14



Unaudited

Unaudited

Audited


Note

'000

'000

'000

Continuing Operations





Revenue

5

704

688

1,405

Cost of sales


(508)

(484)

(1,154)






Gross profit


196

204

250

Other income / (expense)


-

-

68

Goodwill impairment


-

-

(1,700)

Administrative expenses


(308)

(330)

(511)






Operating loss


(112)

(126)

(1,893)

Finance expenses


(19)

(10)

(38)






Loss before taxation from continuing Operations


(131)

(136)

(1,931)

Taxation

4

-

-

-

Loss for the year from continuing operations


(131)

(136)

(1,931)

Discontinued Operations





Loss after tax for the year


(58)

(64)

(61)

Loss for the year


(189)

(200)

(1,992)

Other Comprehensive loss




Exchange differences on translating

foreign operations

296

57

(60)

Total comprehensive loss for the period

net of tax

107

(143)

(2,052)





Loss for the year attributable to:




Owner of the Company

(190)

(199)

(1,990)

Non-controlling

1

(1)

(3)


(189)

(200)

(1,992)

Total comprehensive loss attributable to: attributable to:





Owner of the Company

109

(141)

(2,049)


Non-controlling

(2)

(2)

(3)



107

(143)

(2,052)


Loss per ordinary share (pence)




Basicand Diluted

2

(0.15)

(0.17)

(1.64)






Loss per ordinary share for continuing Ordinary Share (pence)





Basicand Diluted

2

(0.11)

(0.12)

(1.59)






* 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 2015



30.06.15

30.06.14

31.12.14


Note

Unaudited

Unaudited

Audited



'000

'000

'000

ASSETS

Non-current assets





Intangible assets


1,485

3,134

1,505

Property, plant and equipment


71

134

75






Total non-current assets


1,556

3,268

1,580






Current assets





Trade and other receivables


1,191

1,047

1,388

Cash and cash equivalents


383

288

254



1,574

1,335

1,642

Assets held for sales


1,012

1,108

876

Total current assets


2,586

2,443

2,518






TOTAL ASSETS


4,142

5,711

4,098






EQUITY

Capital and Reserves





Share capital

6

6,074

6,045

6,074

Share premium account

6

1,507

1,507

1,507

Reserves


(7,675)

(5,618)

(7,522)

Total shareholders' equity


(94)

1,934

59

Non-controlling interests


(4)

(3)

(5)

Total equity interest


(99)

1,931

54

Current liabilities


2,719

2,244

2,792

Liabilities directly associated with the assets held for sales


1,349

1,240

1,090






Total current liabilities


4,068

3,484

3,882



Non-current liabilities





Other payables


129

252

118

Deferred tax liabilities


44

44

44






Total non-current liabilities


173

296

162






TOTAL EQUITY AND LIABILITIES


4,142

5,711

4,098








Consolidated Statement of Cash Flows

Six months ended 30 June 2015


30.06.15

30.06.14

31.12.14


Unaudited

Unaudited

Audited


'000

'000

'000

Cash flows from operating activities




Loss before taxation

(131)

(136)

(1,931)

Loss before taxation for discontinued operation

(58)

(64)

(61)

Adjustments for:




Amortisation of intangible assets

10

7

20

Depreciation of property, plant and equipment

33

45

61

Gain on disposal of property, plant and equipment

-

-

-

Disposal of a non-controlling interest

-

-

-

Goodwill impairment



1,700

Finance costs

12

12

20

Cash from operating activities before changes in working capital

(124)

(136)

(191)

Decrease /(increase) in inventory

112


(5)

(Increase)/decrease in trade and other receivables

(256)

(852)

(772)

Increase in trade and other payables

412

1,003

1,012

Cash flows from operations

15

44




Interest paid

-

-

1

Net cash used in operations

15

45




Investing activities




Purchase of intangible assets

-

-

(85)

Purchase of property, plant and equipment

(39)

(63)

(13)





Net cash used in investing activities

(39)

(63)

(98)




Financing activities




Interest paid

(12)

-

(20)

Term Loan

-

-

-

Advance from shareholders

5

-

27

Repayment of hire purchase liabilities

(2)

(2)

(4)

Net cash (used in)/generated by financing activities

(2)

3



Net increase/ (decrease) in cash and cash equivalents

96

(50)

(50)




Effect of exchange rate changes

-

33

-

Cash and cash equivalents at the beginning of the period

287

344

304




Cash and cash equivalents at the end of the period

383

287

254






Consolidated Statement of Changes in Equity

Six months ended 30 June 2015


Share capital

Share Premium

Exchange Reserves

Retained Earnings

Total

Non-Controlling Interest

Total


'000

'000

'000

'000

'000

'000

'000

Balance at 01st January 2013

6.045

1,507

(127)

(4,863)

2,562

-

2,562









Loss for the year

-

-

-

(676)

(676)

(2)

(678)

Exchange differences

-

-

132

-

132

-

132

Total comprehensive loss for the year

-

-

132

(676)

(544)

(2)

(546)









Disposal of non-controlling interest without a loss of control

-

-

-

61

61

-

61

Balance at 31 December 2013

6.045

1,507

5

(5,478)

2,079

(2)

2,077









Loss for the year

-

-

-

(1,990)

(1,990)

(2)

(1,992)

Exchange differences

-

-

(59)

-

(59)

(1)

(60)

Total comprehensive loss for the year
Transactions with owners in their capacity as owners

-

-

(59)

(1,990)

(2,049)

(3)

(2,052)

Issue of shares

29

-

-

-

-

-

-

Balance at 31 December 2014

6,074

1,507

(54)

(7,468)

30

(5)

25









Loss for the year

-

-

-

(190)

(190)

1

(189)

Exchange differences

-

-

65

-

65

-

65

Total comprehensive loss for the year
Transactions with owners in their capacity as owners

-

-

65

(190)

(125)

1

(124)









Issue of shares

-

-

-

-

-

-

-

Balance at 30 June 2015

6,074

1,507

11

(7,658)

(95)

(4)

(99)









Notes to the Interim Financial Information

Six month period ended 30 June 2015

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 2015 and are consistent with those disclosed in the group's Report and Financial Statements for the year ended 31 December 2014.

The interim results have not been reviewed nor audited by the Company's auditors. The comparatives for the year ended 31 December 2014 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 30 September 2015.

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 30.06.15

Period ended

30.06.14

Year ended 31.12.14


'000

(unaudited)

'000

(unaudited)

'000

(audited)

Loss after taxation




- Continued operation

(131)

(136)

(1,929)

- Discontinued operation

(58)

(64)

(61)

-

(189)

(200)

(1,990)

-




Basic weighted average shares in issue

121,492,004

120,909,108

121,492,004





Basic and diluted loss per share based on issued share capital (pence)

(0.15)

(0.17)

(1.64)

3. Discontinued operations

On 1 August 2014, the Group publicly announced the divestment of 51% interest in Medilink (Beijing) TPA Services Co Limited ("Medilink China"), a wholly owned subsidiary, to Selfdoctor (Beijing) Technology Co Limited ("Selfdoctor") for a nominal consideration of RMB 10.00 (approximately 1.00) (the "Divestment"). The Group retain a 49% interest in Medilink China.

The completion of the divestment took place on 10 July 2015, when the transfer of ownership actually took place. At 31 December 2014, Medilink China was classified as a disposal group held for sale and as discontinued operations.

The business of Medilink China represents the entirety of the Group's operating segment in China. With Medilink China being classified as discontinued operations, the China operating segment is no longer presented as an operating segment. The results of Medilink China for the year are presented below:


Period ended 30.06.15

Period ended

30.06.14

Year ended 31.12.14


'000

(unaudited)

'000

(unaudited)

'000

(audited)

Revenue

447

374

886

Expenses

(503)

(437)

(944)

Operating income

-

1

1

Finance costs

(2)

(2)

(4)

Loss before tax from discontinued operations

(58)

(64)

(61)

Taxation

-

-

-

Loss for the year from discontinued operations

(58)

(64)

(61)

The major classes of assets and liabilities of Medilink China classified as assets held for sale as at 30 June 2015 are, as follow:


Period

Ended

30.06.2015


'000

Property, plant and equipment

35

Trade and other receivables

796

Cash and cash equivalents

181



Assets held for sales

1,012



Trade and other payables

1,147

HP creditors

1

Loan from a director

200



Liabilities directly associated with assets held for sale

1,348



Net liabilities directly associated with disposal group

336

The net cash flows incurred by Medilink China are, as follow:


Period Ended 30.06.2015

'000

Operating

218

Investing

(3)

Financing

(244)

Net cash inflow / (outflow)

(29)

Loss per share from discontinued operations

Year ended 30.06.2015

'000

(unaudited)

Year ended 31.12.2014

'000

(audited)

Basic and diluted loss per share (pence)

0.05

0.14




4. Dividend

The Directors do not propose a dividend in the period.

5. Taxation

No charge to taxation arises in the six months ended 30 June 2015.

6. 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 2015 (unaudited)

Third party administrator

Software licensing

Consolidation

Total


'000

'000

'000

'000

External revenue

701

3

-

704

Internal revenue

-

-

-

-

Total revenue

701

3

-

704






Interest expenses

(20)

-

-

(20)

Depreciation and amortisation

(109)

-

-

(109)

Corporation tax

-

-

-

-

Earning before tax (EBT)

(58)

(6)

(67)

(131)






Assets

6,602

182

(2,642)

4,142

Liabilities

(7,129)

(329)

3,217

(4,241)

(i) The assets of third party administrator include the goodwill on consolidation of 1,338,000.

Revenues from the Group's major customer AIA Bhd amounted to 276,621: (H1 2014: 282,485) arising from sales in the third party administrator segment.

30 June 2014 (unaudited)

Third party administration

Software licensing

Consolidation

Total


'000

'000

'000

'000

External revenue

659

34

-

688

Internal revenue

-

30

(30)

-

Total revenue

659

64

(30)

688






Interest expenses

-

-

-

-

Depreciation and amortisation

(45)

-

-

(45)

Corporation tax

-

-

-

-

Earning before tax (EBT)

(136)

-

-

(136)






Assets

6,571

189

(1,049)

5,711

Liabilities

(6,609)

(320)

3,150

(3,779)

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

31 December 2014 (audited)

Third party administration

Software licensing

Consolidation

Total


'000

'000

'000

'000

External revenue

1,296

109

-

1,405

Internal revenue

133

90

(223)

-

Total revenue

1,429

199

(223)

1,405






Interest revenue

-

-

-

-

Interest expenses

38

-

-

38

Depreciation and amortisation

80

1

-

81

Impairment loss

(1,700)

-

-

(1,700)

Earning before tax (EBT)

(2,097)

(8)

174

(1,931)






Assets

4,654

185

(741)

4,098

Liabilities

(6,810)

(326)

3,092

(4,044)

The assets of third party administrator are including the goodwill on consolidation of 1,338,000 (2013: 3,038,000)

Revenues from customers amounted to 263,249: AIA Bhd (Previously known as ING Insurance Bhd) compared with year 2013: 243,685: AIA Bhd, arising from sales by third party administrator segment.



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

30 June 2015 (unaudited)

Jersey

Singapore

Discontinued Operation (China

Malaysia

Total


'000

'000

'000

'000

'000

Revenue

-

292

-

412

704

Intangible assets

-

-

-

147

147

Goodwill

1,338

-

-

-

1,338

PPE

-

-

-

71

71







30 June 2014 (unaudited)

Jersey

Singapore

Discontinued Operation (China

Malaysia

Total


'000

'000

'000

'000

'000

Revenue

-

294

-

394

688

Intangible assets

-

-

-

96

96

Goodwill

3,038

-

-

-

3,038

PPE

-

-

-

133

133







31 Dec 2014 (audited)

Jersey

Singapore

Discontinued Operation (China

Malaysia

Total


'000

'000

'000

'000

'000

Revenue

-

642

-

762

1,405

Intangible assets

-

-

-

167

167

Goodwill

1,338

-

-

-

1,338

PPE

-

-

-

75

75

7. 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 2015

'000

30 June 2014

'000

31 December 2014

'000

Authorised:




200,000,000 Ordinary Shares of 5p each

10,000

10,000

10,000





Issued:




121,492,004 Ordinary Shares of 5p each

6,074

6,045

6,074

8. Foreign currency exchange rate

The following significant exchange rates applied during the period:


Average Rate

Reporting Date

1 : RMB

9.6783

9.5700

1 : SGD

2.0636

2.1222

1 : MYR

5.5890

5.9345

1 : HKD

12.1386

12.1845

9. Post Balance Sheet Event

On 1 August 2014, the Group entered into a Sales and Purchase Agreement with Selfdoctor (Beijing) Technology Co. Limited to divest 51% of its interest in Medilink (Beijing) TPA Services Co Limited. The divestment was fully completed on 10 July 2015 when the transfer of ownership took place. With a strategic local partner in place and with enhanced financial support it is believed this will add value to the China business and help expand Medilink China's business activities

10. 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 atQueensway House, Hilgrove Street, St Helier, Jersey JE1 1ES.

11. Seasonality of the group business

There are no seasonal factors that materially affect the operations of any company in the Group.

- Ends -


This information is provided by RNS
The company news service from the London Stock Exchange
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