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