MiLOC Group Limited - Interim results 30 June 2021 and Convertible Bond
RNS Number : 5936N
MiLOC Group Limited
30 September 2021
 

30 September 2021

 

 

MiLOC Group Limited

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

 

Interim results for the six months ended 30 June 2021

 

Extension of Convertible Bond

 

 

Chief Executive Officer's Statement

 

MiLOC Group Limited (AQSE: ML.P), the pharmaceutical and healthcare group announces the results of the Company and its subsidiaries for the six month period ended 30 June 2021.

 

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.

 

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.

 

The Group has been taking extensive steps to reduce operating costs to the absolute minimum and has brought in new products to the Group - SD Labs products including SDX, SDST and SD Pro, a high performance full protection self-disinfecting coating spray with one spray protects from 90 to 180 days. The Directors of the Company believe that SDX is the only and fastest disinfectant that eliminates Covid-19 under 1 minute. The management remain confident that the business can adjust to the challenges it presents.

 

Financial highlights

 

·  Revenue for the six months ended 30 June 2021: HK$4,022,202 (30 June 2020: HK$14,422,154)

·  Gross profit for the six months ended 30 June 2021: HK$520,442 (30 June 2020: HK$5,117,865)

·  Loss for the six months ended 30 June 2021: HK$4,971,398 (30 June 2020: HK$14,363,177)

· The basic and diluted loss per share for the six months ended 30 June 2021: HK$0.05 (30 June 2020: HK$0.18)

·  The Group's cash position as at 30 June 2021: HK$286,323 (30 June 2020: HK$(247,254) 

 

 

 

 

 

Review of significant activities

 

 

(a)  Private Placings

In January and June 2021, the Company entered into placing agreements with four individual shareholders to issue 1,111,524 new US$0.001 ordinary shares at a placing price of 28.5p per share to raise approximately HK$3,367,885. The placing and allotment are completed on 10 June 2021.

 

(b)  Convertible Bond

On 19 July 2021, the Company entered into an extension agreement for the Convertible Bond. The maturity date extended to 19 January 2023 and the coupon rate adjusted to seven point five percent (7.5%) per annum for the period from 20 July 2021 to 19 April 2022 and eight point five percent (8.5%) per annum for the period from 20 April 2022 to 19 January 2023. All other terms remain unchanged. The Convertible Bond was first signed with Murray Investment Fund Company Limited on 19 July 2016.

 

Financial review

 

(i) Income statement items

 

The Group's revenue for the six months ended 30 June 2021 amounted to HK$4,022,202, a decrease of HK$10,399,952 or 72.1% as compared to the six months ended 30 June 2020. This was attributable to the decreased revenue generated from sale of healthcare products. The Group's gross profits and gross profit margin for the six months ended 30 June 2021 amounted to HK$520,442 and 12.94% (30 June 2020: HK$5,117,865 and 35.49%) respectively. The Group's other revenue from management fee income for the six months ended 30 June 2021 amounted to HK$120,000, the same as compared to the six months ended 30 June 2020

 

The Group's distribution costs for the six months ended 30 June 2021 amounted to HK$226,853, a decrease of HK$13,566,298 or 98.3% as compared to the same period in 2020. The Group's administrative expenses for the six months ended 30 June 2021 amounted to HK$6,873,929, a decrease of HK$272,472 or 3.8% as compared to the six months ended 30 June 2020.

 

The Finance Costs for the six months ended 30 June 2021 amounted to HK$270,915, this was related to the interest paid for the convertible bond.

 

The unaudited net loss for the period ended 30 June 2021 shows a decrease of HK$9,391,778 and 65.39% compared to the same period in 2020. This was attributable to the decrease of distribution cost 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$306,065 as at 30 June 2021, compared to the same period in 2020, mainly due to the depreciation for leasehold improvement and office equipment.

 

The Group's inventories as at 30 June 2021 amounted to HK$1,468,889 with a decrease of HK$5,941,946 over the balance as at 30 June 2020. This was mainly due to no purchase of inventory during the period.

 

The Group's other receivables and prepayments as at 30 June 2021 decreased by HK$1,640,432 or 43.97% compared to the same period in 2020. This was due to the partial payment of a Royalty fee by a subsidiary that had been recorded as expenses by the end of 2020.

 

The Group's trade payables as at 30 June 2021 amounted to HK$6,392,320 with a decrease of HK$1,835,806 over the balance as at 30 June 2020, this was mainly due to the settlements to vendors for the period.

 

The Group's cash and cash equivalents increased by HK$533,577 as at 30 June 2021 compared to 30 June 2020.

 

 

Outlook

 

The Group has down sized the products of the Company and has switched some of the resources to our new products to be launched. We will continue to generate income through the following strategies:

a. to provide medical supplies to our customers over the world; 

 

b.  to sell SD Labs products including but not limited to SDST and SD Pro that with one spray can deactivate viruses, and kill bacteria and fungi from 90 to180 days. We are the exclusive distributor in Hong Kong. We believe this product will make a substantial contribution to our income in the coming years;

c.   to continue to focus on promoting and generate more sales from our online distribution of our FMCG products in China;

d.   to launch a special design crushing pen; and

e.   to cut down non-profit making products and to minimize operating costs

 

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 the same as previous years, which 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 locations where we operate and potentially capitalise on opportunities when the virus impact subsides.

 

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 continue 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 2021

 



The Group

 



Unaudited


Unaudited


Audited



6 months ended 30 June 2021


6 months ended 30 June 2020


Year ended 31 December 2020



HK$


HK$


HK$

From continuing operations














Revenue


4,022,202


14,422,154


20,466,164

Cost of sales


(3,501,760)


(9,304,289)


(11,562,972)

Impairment loss on inventory


-


-


(1,988,453)















Gross profit


520,442


5,117,865


6,914,739








Other revenue


1,844,477


1,897,119


32,519,220

Distribution costs


(226,853)


(13,793,151)


(16,004,562)

Administrative expenses


(6,873,929)


(7,146,401)


(14,248,318)

Foreign exchange gains/(losses), net


35,275


(282,525)


(159,439)















Operating loss


(4,700,588)


(14,207,093)


9,021,640








Impairment loss on trade receivable


-


-


(2,382,672)

Finance costs


(270,915)


(156,342)


(419,559)

Interest income


105


258


314















Loss before taxation


(4,971,398)


(14,363,177)


6,219,723

Taxation


-


-


-















Loss for the period/year


(4,971,398)


(14,363,177)


6,219,723








Other comprehensive income






 

Exchange differences arising from translation


(132,470)


16,988


(453,717)















Total comprehensive result for the period/year


(5,103,868)


(14,346,189)


 

5,766,006















Loss for the period/year attributable to:







Equity holders of the parent entity


(4,208,865)


(14,840,750)


9,176,764

Non-controlling interests


(762,533)


477,573


(2,957,041)










(4,971,398)


(14,363,177)


6,219,723








Total comprehensive loss for the period/year attributable to:







Equity holders of the parent entity


(4,341,335)


(14,823,762)


8,723,047

Non-controlling interests


(762,533)


477,573


(2,957,041)

















(5,103,868)


(14,346,189)


5,766,006








Loss per share - from continuing operations (HK$)







Basic and diluted


(0.05)


(0.18)


0.11








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$4,208,865 (For the six months ended 30 June 2020: Loss of HK$14,840,750; For the 12 months ended 31 December 2020: Profit of HK$9,176,764) and the weighted average number of ordinary shares of 84,791,248 (For the six months ended 30 June 2020 weighted average number of ordinary shares of 84,137,136; For the 12 months ended 31 December 2020: 84,184,704) in issue during the period.

 

 

 

 

 

MiLOC Group Limited

Consolidated Statement of Financial Position

As at 30 June 2021



 



Unaudited

As at 30 June 2021


Unaudited

As at 30 June 2020

 

 

Audited

As at 31

December

 2020



HK$


HK$


HK$

Assets







Non-current assets







Fixed assets


192,969


499,034


365,788

Other intangible assets


3,035,715


3,392,857


3,214,285

Right-of-use assets


668,222


4,243,608


2,370,463

















3,896,906


8,135,499


5,950,536















Current assets







Inventories


1,468,889


7,410,835


4,393,462

Trade receivables


1,342,157


3,440,824


376,798

Other receivables and prepayments


2,090,307


3,730,739


2,111,512

Cash and cash equivalents


286,323


(247,254)


234,118

















5,187,676


14,335,144


7,115,890















Total assets


9,084,582


22,470,643


13,066,426















Equity and liabilities







Equity







Share capital


665,650


655,387


656,981

Share premium


96,267,575


92,315,641


92,908,360

Reserve


(135,827,784)


(155,033,258)


(131,486,449)















Equity attributable to the parent entity


(38,894,559)


(62,062,230)


(37,921,108)

Non-controlling interest


3,187,283


7,384,389


3,949,815















Total equity


(35,707,276)


(54,677,841)


(33,971,293)















Liabilities







Current liabilities







Trade payables


6,392,320


8,228,126


7,209,544

Other payables and accruals


28,409,010


56,966,299


28,365,680

Amount due to directors


3,607,206


2,393,944


3,444,748

Lease liabilities


798,842


4,430,284


2,679,127

Borrowings


5,584,480


5,129,831


5,338,620










44,791,858


77,148,484


47,037,719






















Total liabilities


44,791,858


77,148,484


47,037,719















Total equity and liabilities


9,084,582


22,470,643


13,066,426








The Group's consolidated financial statements for the six months ended 30 June 2020 and 2021 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 2020 have been adopted in the preparation of the Group's unaudited consolidated financial statements for the six months ended 30 June 2021.

 

 

 

 

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