REG - Sealand Capital - Unaudited Interim Results
29/09/2023 07:00
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RNS Number : 0583O Sealand Capital Galaxy Limited 29 September 2023
For release: 07.00, 29 September 2023
Sealand Capital Galaxy Limited
("Sealand" or the "Company")
Unaudited Interim Results
Sealand Capital Galaxy Limited (LSE: SCGL) announces that it has today
published its unaudited Interim Results for the six months ended 30 June 2023
with respect to the Company and its subsidiaries (the "Group").
Nelson Law, Executive Chairman of the Company commented:
"The group's focus on expanding its presence in the e-commerce sector in China
has been a key priority. Significant resources have been allocated to this
endeavor, recognizing the vast potential of this market. In addition to the
existing presence on Tmall, the group is actively working to collaborate with
other platforms, aiming to reach a wider customer base and increase market
share in online retail."
He added:
"The group is actively exploring opportunities for joint ventures in China.
Building upon previous success in the advertising sector, the group seeks
potential partnerships in this area. Additionally, venturing into new but
related areas such as app design and interlink programs is a strategic move to
diversify revenue streams and enhance competitiveness in the market.
"Despite the challenges posed by the pandemic, the group remains optimistic
about the future and committed to identifying new growth opportunities within
current product lines and through strategic partnerships. By continuously
adapting to evolving market conditions and leveraging strengths, the group is
confident in its ability to drive long-term success and deliver value to
stakeholders."
-Ends-
Enquiries:
Sealand Capital Galaxy Limited
Law Chung Lam Nelson, Executive Chairman + 44 (0) 753 795 9788
Notes to Editors:
The Company's Shares are traded on the Official List of the London Stock
Exchange's main market for listed securities under the ticker SCGL.
Further information on Sealand is available on its
website http://www.scg-ltd.com/ (http://www.scg-ltd.com/)
MANAGEMENT DISCUSSION AND ANALYSIS
Sealand Capital Galaxy Limited is a company acting as a special purpose
acquisition company. The Group is engaged in digital marketing, mobile payment
and other IT related business. Today it announces its results for the six
months ended 30 June 2023.
Business Review
The group's focus on expanding its presence in the e-commerce sector in China
has been a key priority. Significant resources have been allocated to this
endeavor, recognizing the vast potential of this market. In addition to the
existing presence on Tmall, the group is actively working to collaborate with
other platforms, aiming to reach a wider customer base and increase market
share in online retail.
Collaboration with local retail partners has also yielded positive results.
One of the group's sales partners has successfully expanded to four physical
stores, with plans for a fifth store in the near future. The group's brand
accounts for approximately one-third of their total unit sales, demonstrating
the mutually beneficial nature of the partnership.
Further nurturing and strengthening such collaborations will enhance the
group's footprint in the retail sector.
Overall, the strategic focus on e-commerce expansion and collaboration with
local retail partners has proven successful. The group remains committed to
capitalizing on emerging opportunities, both online and offline, to drive
growth and maximize shareholder value.
Financial Review
During the six months ended 30 June 2023, the loss attributable to ordinary
shareholders was £203,951 (2022:
£226,910), and the revenue for the period was £61,198 (2021: £76,071).
Prospects
After the impact of the COVID-19 pandemic, the group has observed a gradual
recovery in sales, albeit slower than anticipated. To fuel future growth and
expansion, the group is focusing on soliciting new agency partnerships for
additional brands, particularly in the female skincare category. Leveraging
existing distribution channels and industry expertise, the group aims to
capture a larger share of the market and drive sales.
Moreover, the group is actively exploring opportunities for joint ventures in
China. Building upon previous success in the advertising sector, the group
seeks potential partnerships in this area. Additionally, venturing into new
domains such as app design and interlink programs is a strategic move to
diversify revenue streams and enhance competitiveness in the market.
Despite the challenges posed by the pandemic, the group remains optimistic
about the future and committed to identifying new growth opportunities within
current product lines and through strategic partnerships. By continuously
adapting to evolving market conditions and leveraging strengths, the group is
confident in its ability to drive long-term success and deliver value to
stakeholders.
Going Concern
As at 30 June 2023, the Group has cash and cash equivalent balances of £7,630
and net current liabilities and net liabilities of £1,057,446.
The directors' cash-flow projections for the forthcoming 12 months conclude
there will be a need for additional cash resources. The directors are in
discussions with some parties that may raise further equity and/or loans.
There is no certainty that any such funds will be forthcoming or the price and
other terms will be acceptable.
Directors
The following directors served during the six months ended 30 June 2023: Mr
Chung Lam Nelson Law(Chairman and Chief Financial Officer)
Mr Geoffrey John Griggs(Non-executive Director)
I would like to thank my colleagues for their continued perseverance and
commitment towards reaching the Groups' objectives.
Chung Lam Nelson Law Chairman
29 September 2023
SEALAND CAPITAL GALAXY
PRINCIPAL RISKS AND UNCERTAINTIES
The Board regularly monitors exposure to risks and uncertainties that it
considers key as set out below.
The group faces risks associated with integrating and assimilating acquired
businesses. Difficulties may arise due to cultural differences, operational
complexities, and organizational alignment, which could impact the performance
and profitability of acquired entities.
International Interest Rates and Inflation
Rising international interest rates and inflation pose a risk to the group's
cost of goods sold. Increased borrowing costs and higher input costs, can
impact profitability. The group actively monitors these macroeconomic factors
and implements strategies to mitigate their adverse effects on financial
performance.
Currency Fluctuations
The depreciation of the RMB by 10% has affected the group's total sales
turnover. Weaker currency reduces purchasing power in China, negatively
impacting demand for products and services. Currency fluctuations introduce
volatility and uncertainty, requiring active management of currency exposures
through hedging strategies.
Moreover the 10% depreciation of the RMB has impacted the total sales turnover
due to a decrease in purchasing power in China.
The group remains vigilant in managing these risks, implementing appropriate
risk mitigation strategies, and monitoring market conditions to ensure
long-term resilience and sustainability.
Competition
The group acknowledges the need for horizontal integration to expand market
presence and capture a larger industry share. However, this expansion may
strain resources. Negotiating new product lines requires significant
investments in distribution networks, and marketing. Intensified competition
may impact profit margins. The group actively pursues strategic partnerships
and diversification to enhance competitive position. Prudent decision-making
and effective resource allocation are crucial in a dynamic market environment.
Financial Risks
The Group financial risks including foreign exchange risk, interest rate risk,
credit risk, liquidity risk and cash flow risk are carefully monitored by the
Board.
Chung Lam Nelson Law Chairman
29 September 2023
SEALAND CAPITAL GALAXY LIMITED
STATEMENT OF DIRECTORS' RESPONSIBILITIES
The Directors confirm that to the best of their knowledge:
(a) the condensed set of financial statements, which has been
prepared in accordance with IAS 34 "Interim Financial Reporting", gives a true
and fair view of the assets, liabilities, financial position and loss of the
Group as a whole as required by DTR 4.2.4R subject to the comment on the going
concern position of the Group.
(b) the interim management report includes a fair review of the
information required by DTR 4.2.7R (indication of important events during the
first six months of the year and a description of principal risks and
uncertainties for the remaining six months of the year); and
(c) the interim management report includes a fair review of the
information required by DTR 4.2.8R (disclosure of related parties'
transactions and changes therein).
By order of the Board
Chung Lam Nelson Law Chairman
29 September 2023
SEALAND CAPITAL GALAXY LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF PROFIT OR LOSS FOR THE SIX MONTHS ENDED 30
JUNE 2023
Six months Six months
ended ended
30 June 2023 30 June 2022
(Unaudited) (Unaudited)
Note £ £
Revenue 5 61,198 76,071
Cost of services (38,899) (62,953)
Gross profit 22,299 13,118
Other income 5 8,151 16,313
Administrative expenses (275,488) (237,555)
Finance costs (425) (1,046)
Gain on disposal of a subsidiary - 7,644
Gain on deregistration of subsidiaries 41,207 -
Loss before tax 6 (204,256) (201,526)
Income tax expenses - -
Loss for the period (204,256) (201,526)
Attributable to:
Equity holders of the Company (203,951) (226,910)
Non-controlling interests (305) 25,384
(204,256) (201,526)
Loss per share attributable to equity holders of the Company
Pence Pence
Basic and diluted 8 (*) (*)
* Less than 0.001 pence
The notes to the financial statements form an integral part of these financial
statements.
UNAUDITED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE SIX MONTHS
ENDED 30 JUNE 2023
Six months Six months
ended ended
30 June 2023 (Unaudited) 30 June 2022 (Unaudited)
£ £
Note
Loss for the period (204,256) (201,526)
Other comprehensive income/(loss)
Items to be reclassified subsequently to profit or loss:
-Exchange differences on translation of foreign operations 39,653 (86,249)
Other comprehensive income for the period, net of tax 39,653 (86,249)
Total comprehensive loss for the period (164,603) (287,775)
Attributable to:
Equity holders of the Company (173,999) (287,823)
Non-controlling interests 9,396 48
(164,603) (287,775)
The notes to the financial statements form an integral part of these financial
statements
UNAUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2023
At At
30 June 2023 (Unaudited) 31 December 2022 (Audited)
£ £
Note
ASSETS
Non-current assets
Property, plant and equipment 9 28,704 44,791
Current assets
Inventories 10 91,261 106,088
Prepayments and other receivables 55,965 58,305
Trade receivables 26,847 26,430
Cash and cash equivalents 7,630 35,567
181,703 226,390
Current liabilities
Trade payables 34,691 36,110
Other payables and accrued expenses 534,517 480,213
Amount due to a director 667,154 602,646
Finance lease liabilities 11 31,491 29,858
1,267,853 1,148,827
Net current liabilities (1,086,150) (922,437)
Total assets less current liabilities (1,057,446) (877,646)
Non-current liabilities
Finance lease liabilities 11 - 15,197
Net liabilities (1,057,446) (892,843)
Capital and reserves
Share capital 12 71,581 71,581
Reserves (817,121) (643,122)
Total equity attributable to equity shareholders of the Company (745,540) (571,541)
Non-controlling interests (311,906) (321,302)
Total equity (1,057,446) (892,843)
The notes to the financial statements form an integral part of these financial
statements
SEALAND CAPITAL GALAXY LIMITED
UNAUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE SIX MONTHS ENDED
30 JUNE 2023
Attributable to the equity holders of the Company
Share capital Share-based payment reserve Accumulated losses Non-controlling interests
£ Share premium £ £ Exchange reserve Total £ Total equity
£ £ £ £
Six months ended 30 June 2023
At 1 January 2023 (Audited) 71,581 6,917,830 357,417 (7,914,649) (3,720) (571,541) (321,302) (892,843)
Loss for the period - - - (203,951) - (203,951) (305) (204,256)
Exchange differences arising on translation - - - - 29,952 29,952 9,701 39,653
Total comprehensive (loss)/income - - - (203,951) 29,952 (173,999) 9,396 (164,603)
Deregistration of subsidiaries - - - - - - - -
At 30 June 2023 (Unaudited) 71,581 6,917,830 357,417 (8,118,600) 26,232 (745,540) (311,906) (1,057,446)
Six months ended 30 June 2022
At 1 January 2022 (Audited) 59,569 6,660,898 357,417 (7,715,246) 4,817 (632,545) (385,572) (1,018,117)
Loss for the period - - - (226,910) - (226,910) 25,384 (201,526)
Exchange differences arising on translation - - - - (60,913) (60,913) (25,336) (86,249)
Total comprehensive (loss)/income - - - (226,910) (60,913) (287,823) 48 (287,775)
Issue of ordinary shares 491 26,509 - - - 27,000 - 27,000
Disposal of subsidiaries - - - - - - 20,137 20,137
At 30 June 2022 (Unaudited) 60,060 6,687,407 357,417 (7,942,156) (56,096) (893,368) (365,387) (1,258,755)
The notes to the financial statements form an integral part of these financial
statements.
SEALAND CAPITAL GALAXY LIMITED UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
Six months Six months
ended ended
30 June 2023 30 June 2022
(Unaudited) (Unaudited)
£ £
CASH FLOWS FROM OPERATING ACTIVITIES
Loss before tax (204,256) (201,526)
Adjustments for :
Depreciation 14,693 16,373
Gain on disposal of a subsidiary - (7,644)
Gain on deregistration of subsidiaries (41,207) -
Interest expenses 425 1,025
Bank interest income (10) (10)
Operating cash flows before movements in working capital (230,355) (191,782)
Decrease/(increase) in inventories 14,827 (30,655)
Decrease/(increase) in prepayments and other receivables 1,968 (1,746)
Increase in trade receivables (417) (23,753)
Increase in amount due to a director 64,508 180,197
(Decrease)/increase in trade payables (1,419) 40,361
Increase in other payables and accrued expenses 98,009 106,288
Net cash (used in)/generated from operations (52,879) 78,910
Payment of interest portion of lease liabilities (425) (1,025)
Net cash generated from/(used in) operating activities (53,304) 77,885
CASH FLOWS FROM INVESTING ACTIVITIES
Net cash outflow in respect of the disposal of a subsidiary - (143)
Net cash outflow on deregistration of subsidiaries (989) -
Interest income received 10 10
Net cash used in investing activities (979) (133)
CASH FLOWS FROM FINANCING ACTIVITIES
Issue of ordinary shares - 27,000
Payment of principal portion of lease liabilities (12,099) (15,508)
Net cash (used in)/generated from financing activities (12,099) 11,492
Net (decrease)/increase in cash and cash equivalents (66,382) 89,244
Foreign exchange realignment 38,445 (84,411)
Cash and cash equivalents at 1 January 35,567 8,198
Cash and cash equivalents at 30 June 7,630 13,031
The notes to the financial statements form an integral part of these financial
statements.
SEALAND CAPITAL GALAXY LIMITED
NOTES TO UNAUDITED INTERIM RESULTS
FOR THE SIX MONTHS ENDED 30 JUNE 2023
1. GENERAL INFORMATION
Sealand Capital Galaxy Limited (the "Company") was incorporated in the Cayman
Islands on 22 May 2015 as an exempted Company with limited liability under the
Companies Law of the Cayman Islands. The registered office of the Company is
Willow House, PO Box 709, Cricket Square, Grand Cayman, KY1-1107, Cayman
Islands. These unaudited consolidated interim financial statements comprise
the Company and its subsidiaries (together referred to as the "Group").
The Company's nature of operations is to act as a special purpose acquisition
company. The Group engaged in digital marketing and other IT and e-Commerce
related businesses.
2. BASIS OF PREPARATION
The unaudited consolidated interim financial statements for the six months
ended 30 June 2023 have been prepared in accordance with the International
Accounting Standard ("IAS") No. 34 "Interim Financial Reporting" issued by the
International Accounting Standards Board ("IASB"). These unaudited
consolidated interim financial statements were not reviewed or audited by our
auditor.
The consolidated interim financial information has been prepared in accordance
with the same accounting policies adopted in the 2022 annual financial
statements extracted, except for the accounting policy changes that are
expected to be reflected in the 2023 annual financial statements.
The preparation of the interim financial information in conformity with IAS 34
requires management to make judgements, estimates and assumptions that affect
the application of policies and reported amounts of assets and liabilities,
income and expenses on a year to date basis. Actual results may differ from
these estimates.
This consolidated interim financial information contains consolidated
financial statements and selected explanatory notes. The notes include an
explanation of events and transactions that are significant to an
understanding of the changes in financial position and performance of the
Group since the 2022 annual financial statements. The consolidated interim
financial statements and notes thereon do not include all of the information
required for a full set of financial statements prepared in accordance with
International Financial Reporting Standards ("IFRSs").
3. GOING CONCERN
The directors' cash projections for the forthcoming 12 months conclude that
there will be a need for additional cash resources. The directors are in
discussion with a number of individuals that may lead to further equity and/or
loans being raised. There is no certainty that any such funds will be
forthcoming or the price and other terms will be acceptable.
4. SEGMENT INFORMATION
The Chief Operating Decision Maker ("CODM") has been identified as the
executive director of the Company who reviews the Group's internal reporting
in order to assess performance and allocate resources. The CODM has determined
the operating segments based on these reports.
For management purposes, the Group is organised into business units based on
their products and services and has reportable operating segments as follows:
(a) The digital marketing and payment segment includes
services on enlisting merchants to mobile payment gateways and providing
digital advertising services; and
(b) The e-commerce segment includes sales of goods through
internet and provision for consultancy services related to e-commerce.
Digital
marketing and
payment e-Commerce Unallocated Total
£ £ £ £
Six months ended 30 June 2023 (Unaudited)
Revenue - 61,198 - 61,198
Segment loss (6,366) (7,081) (190,809) (204,256)
Assets 26 149,841 60,540 210,407
Liabilities 6,488 99,863 1,161,502 1,267,853
Six months ended 30 June 2022 (Unaudited)
Revenue
776 75,295 - 76,071
Segment profit/(loss) (19,264) 13,118 (195,380) (201,526)
Assets 30,984 165,559 37,520 234,063
Liabilities 295,767 139,944 1,057,107 1,492,818
5. REVENUE AND OTHER INCOME
Six months ended Six months ended
30 June 2023 (Unaudited) 30 June 2022 (Unaudited)
£ £
REVENUE
Advertising services - 775
Commission income 642 669
Sales of goods 60,556 74,627
61,198 76,071
OTHER INCOME
Bank interest income 10 10
Others 8,141 16,303
8,151 16,313
6. LOSS BEFORE TAX
Six months ended Six months ended
30 June 2023 (Unaudited) 30 June 2022 (Unaudited)
£ £
Loss before tax has been arrived at after charging: Depreciation - Owned
assets and right of use assets
14,693 16,373
7. EMPLOYEES
The average number of employees during the period was made up as follows:
Six months ended Six months ended
30 June 2023 (Unaudited) 30 June 2022 (Unaudited)
Directors 2 2
Staff 3 2
Directors' remuneration (£) 99,000 99,000
8. BASIC AND DILUTED LOSS PER SHARE
Basic loss per share is calculated by dividing the loss attributable to the
Company's owners of £203,951 (2022: £226,910) by the weighted average number
of 715,815,080 ordinary shares (2022: 598,081,125) in issue during the six
months ended 30 June 2023.
Diluted loss per share was the same as basic loss per share as no potential
dilutive ordinary shares were outstanding for both the six months ended 30
June 2023 and 2022.
9. PROPERTY, PLANT AND EQUIPMENT
Right of use assets
£
At 1 January 2023 (Audited) 44,791
Depreciation for the period (14,693)
Exchange differences (1,394)
At 30 June 2023 (Unaudited) 28,704
10. INVENTORIES
At At 31
30 June 2023 December 2022
£ £
(Unaudited) (Audited)
Finished goods 91,261 106,088
11. LEASE LIABILITIES
The total minimum lease liabilities under finance leases and their present
values at the reporting date are as follows:
At At 31
30 June 2023 December 2022
£ £
(Unaudited) (Audited)
Current portion:
Gross finance lease liabilities 31,808 30,544
Finance expense not recognised (317) (686)
31,491 29,858
Non -current portion:
Gross finance lease liabilities - 15,272
Finance expense not recognised - (75)
- 15,197
Total 31,491 45,055
The net finance lease liabilities are analysed as follows:
- Not later than 1 year 31,491 29,858
- Later than 1 year but not more than 5 years - 15,197
Net finance lease liabilities 31,491 45,055
12. SHARE CAPITAL
Number £
Ordinary shares issued and fully paid
At 1 January 2023 (Audited) and 30 June 2023 (Unaudited) 715,815,080 71,581
13. RELATED PARTY TRANSACTIONS
(a) Details of the compensation of key management personnel
are disclosed in Note 7 to the unaudited interim results.
(b) Apart from the balances with related parties at the end of
the reporting period disclosed elsewhere in the financial statements, the
Company had not entered into any significant related party transactions for
the six months ended 30 June 2023.
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