MiLOC Group Limited - Final Results to 31 December 2021 and Board Roles
Announcement provided by
Crushmetric Group Limited · CUSH01/08/2022 07:00
01 August 2022
MiLOC Group Limited
(the "Company" or the "Group")
Final audited results for the year ended 31 December 2021 and Directorate Changes
Board Roles
MiLOC Group Limited (AQSE: ML.P), the AQUIS Stock Exchange (Formerly: NEX) quoted pharmaceutical and healthcare group, presents its audited consolidated financial statements for the year ended 31 December 2021.
The Company also announces that Dr. Chow Ching Fung has ceased to be an Executive Director and Chairman of the Company, and Dr. Chow Ching will become a Non-Executive Director with immediate effect. Mr. Ivor Colin Shrago who is currently a Non-Executive Director of the Company becomes the Non-Executive Chairman.
Dr. Chow has served as an Executive Director and Chairman of the Company since March 2010. Due to health issue, Dr. Chow decided to change his role to a Non-Executive role, with the consent of the Board.
The Company's new Chairman, Mr. Ivor Shrago said:
"I'd like to thank Dr.Chow for all his work since the time of his appointment. In particular, I would like to recognise the role Dr. Chow has played in the past years to provide professional Traditional Chinese Medical services to every patient of the Company and to introduce all the excellent FMCG products with TCM ingredients to the Company.
Looking forward, the Company will continue to act in the best interests of our shareholders."
Key financial highlights:
· Revenue for the year ended 31 December 2021: HK$4,939,527 (2020: HK$20,466,164)
· Loss for the year: HK$9,455,585 (Profit for 2020: HK$6,219,723)
· The basic loss per share for the year:
· The Group's cash position as at 31 December 2021: HK$435,836 (2020: HK$234,118)
Chairman's Statement
I am pleased to report the 2021 financial year results for MiLOC Group Limited.
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
(iii) the sale and distribution of TCM healthcare and skincare products through wholesale outlets and TCM clinics, the Group's retail store in
COVID-19
The outbreak of COVID-19 continues and creates highly unpredictable challenges. However the Board, as separately reported, has determined to follow strategies that it believes will provide the Group with a secure financial base.
The investment in online platforms for selling products over recent years has resulted in the business being well placed to deliver services and products to its customers without significant 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 continued to explore for new products to be sold by the Group. The management remain confident that the business can adjust to the challenges it presents.
Review of significant activities
(i) Private Placings
In 2021, the Company raised approximately HK$3.6 million through private placings. The proceeds of these subscriptions have been used for general working capital purposes.
(ii) Convertible Bond
On 19 July 2021, the Company entered into an extension agreement for the Convertible Bond. The maturity date was 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.
(iii) Suspension of Clinic Activities
Due to the covid-19 pandemic in
(iv) Termination of Endorsement Agreement
The Company's wholly owned subsidiary, MiLOC Pharmaceutical (HK) Limited ("MPHK"), has entered into a termination of the endorsement agreement with Master Kingdom Limited (Artist's Management Company), a company incorporated in
Due to the outbreak of Covid-19, the Company's operation faces challenges like other companies worldwide. The Company, the Artist and the Artist's Management Company mutually agreed that the Company would stop selling with the Artist's endorsement on 31 May 2021. MPHK has also entered into a termination of the commission agreement which was signed with CN Workshop Limited together with the Endorsement Agreement on 21st January 2019.
Financial review
(i) Revenue, gross profit and other revenue
The Group's revenue for the year ended 31 December 2021 amounted to HK$4,939,527 which represented a 75.9% decrease as compared to the year ended 31 December 2020. It included sales of TCM skincare and haircare products that amounted to approximately HK$2,955,000 (2020: approximately HK$15,698,000) and revenue from its clinic operations that amounted to approximately HK$1,985,000 (2020: approximately HK$4,768,000).
The sales revenue of TCM skincare and hair care products in 2021 has significantly decreased as the Company has stopped selling KooCool+ products since 31 May 2021 and AKFS+ products since November 2021. The revenue from the clinic operations decreased by 58.4% as the Clinic operations has suspended since September 2021 due to COVID-19 pandemic since the beginning of 2020.
The Group's gross loss and gross loss margin for the year ended 31 December 2021 amounted to HK$213,957 and 4% ( gross profit and gross profit margin for 2020: HK$6,914,739 and 34%) respectively. The Group's other revenue for the year ended 31 December 2021 amounted to HK$2,498,000, and a decrease of 92% compared to the year ended 31 December 2020 because of the large amount of reversal of provision of accrued commission and royalty fee last year.
(ii) Operating expenses
The Group's distribution costs for the year ended 31 December 2021 amounted to HK$402,676 which decreased by 97.5% as compared to the year ended 31 December 2020. It was due to the termination of the endorsement agreement of AKFS+ and revised the over provision of royalty fee and commission fee. The Group's administrative expenses for the year ended 31 December 2021 were approximately HK$11,254,000 compared to approximately HK$14,248,000 for the year ended 31 December 2020, a decrease of 21% and less rental expenses occurred during the year.
(iii) Profit and profit per share
The Group's loss for the year amounted to HK$9,455,585 (Profit for 2020: HK$6,219,723). As a result, the Group's basic loss per share for the year was
The Directors do not recommend the payment of a dividend.
(iv) Balance sheet items
The Group's tangible fixed assets as at 31 December 2021 amounted to HK$53,872 which mainly comprised leasehold improvements, furniture and fixtures and office equipment. A decrease of approximately HK$312,000 over the balance as at 31 December 2020, was mainly due to the depreciation of fixed assets for the year.
The Group's other intangible assets as at 31 December 2021 amounted to HK$2,857,142 which represented a decrease of approximately
The Group's right-of-use assets and Lease liabilities-right-of-use assets as at 31 December 2021 amounted to HK$185,826 and HK$348,808 respectively which represented a decrease of approximately HK$2,185,000 and a decrease of approximately HK$2,330,000 respectively as compared to the year ended 2020. The decrease was due to the depreciation charge for the year.
The Group's inventories as at 31 December 2021 amounted to HK$Nil with a decrease of approximately HK$4,373,000 over the balance as at 31 December 2020. This was mainly due to the disposal and write off of inventories during the year after the termination of endorsement agreements for KooCool+ and AKFS+ products.
The Group's other receivables and prepayments as at 31 December 2021 amounted to HK$976,100 with a decrease of approximately HK$1,135,000 over the balance as at 31 December 2020 was due to rental deposit returned in 2021.
The Group's trade payables as at 31 December 2021 amounted to HK$4,835,437 with a decrease of HK$2,374,000 over the balance as at 31 December 2020.
The Group's cash and cash equivalents increased from HK$234,000 as at 31 December 2020 to HK$436,00 as at 31 December 2021. For details of these movements, please refer to the Group's cash flow statement included in the non-statutory group financial statements.
Outlook
The Company faced different challenges during the year 2021, not only because of the continuous impact of Covid-19 but also because of the termination of our endorsements with the haircare and body-care products. Nevertheless, the Company remains positive about its transformation to a more diversified Group with various innovative products to be released to the market.
In the coming year, the Group will continue to maintain income through the following strategy:
a. to continue to focus on promoting and generate more sales from our online distribution of the Crushmetric series of products, including but not limited to the Crushmetric SwitchPens which was launched and the Crushmetric Chairs to be launched soon;
b. to launch a drink with special designed crushing can;
c. to sell SD Labs products including but not limited to SDST and SD Pro that with one spray can inactivate viruses, and kill bacteria and fungi for 90-180 days. We are the exclusive distributor in
d. to cut down non-profit making products and to minimize operating costs.
The outbreak of COVID-19 and the restrictions imposed by the local Governments in both mainland
The Board will continue to take all reasonable efforts to ensure 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.
Ivor Colin Shrago
Chairman
29 July 2022
The financial information in this announcement is derived from the Group's audited consolidated financial statements for the year ended 31 December 2021 which are available at the Company's website www.miloc.com.
The Directors of the Company accept responsibility for the contents of this announcement.
For further information, please contact:-
|
MiLOC ONG Ban Poh Michael - Chief Executive Officer Lo King Yu Lilian - Acting Chief Financial Officer
|
Tel: +852 2110 4221
|
|
AQUIS Exchange Corporate Adviser PETERHOUSE CAPITAL LIMITED Guy Miller Mark Anwyl |
Tel: +44 (0) 20 7469 0930 |
MiLOC Group Limited
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended December 2021
|
|
|
2021 |
|
2020 |
|
|
From continuing operations |
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
|
|
Revenue |
|
4,939,527 |
|
20,466,164 |
|
|
Cost of sales |
|
(4,101,932) |
|
(11,562,972) |
|
|
Impairment loss on inventory |
|
(1,051,552) |
|
(1,988,453) |
|
|
|
|
|
|
|
|
|
Gross (loss)/profit |
|
(213,957) |
|
6,914,739 |
|
|
|
|
|
|
|
|
|
Other revenue |
|
2,497,506 |
|
32,519,220 |
|
|
Distribution costs |
|
(402,676) |
|
(16,004,562) |
|
|
Administrative expenses |
|
(11,253,978) |
|
(14,248,318) |
|
|
Foreign exchange gain/(loss), net |
|
460,283 |
|
(159,439) |
|
|
|
|
|
|
|
|
|
Adjusted Operating (loss)/profit |
|
(8,912,822) |
|
9,021,640 |
|
|
Impairment loss for intangible asset and goodwill |
|
- |
|
- |
|
|
Impairment loss on trade receivable |
|
(143,550) |
|
(2,382,672) |
|
|
|
|
|
|
|
|
|
Operating (loss)/profit |
|
(9,056,372) |
|
6,638,968 |
|
|
Loss on disposal of subsidiaries |
|
- |
|
- |
|
|
Finance costs |
|
(399,673) |
|
(419,559) |
|
|
Interest income |
|
460 |
|
314 |
|
|
(Loss)/profit before taxation |
|
(9,455,585) |
|
6,219,723 |
|
|
Taxation |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
(Loss)/profit for the for year |
|
(9,455,585) |
|
6,219,723 |
|
|
|
|
|
|
|
|
|
Other comprehensive income / (loss) |
|
|
|
|
|
|
Exchange differences arising from translation |
|
(280,737) |
|
(453,717) |
|
|
Total comprehensive result for the year |
|
(9,736,322) |
|
5,766,006 |
|
|
|
|
|
|
|
|
|
(Loss)/profit for the year attributable to: |
|
|
|
|
|
|
The equity holders of the parent entity |
|
(5,216,634) |
|
9,176,764 |
|
|
Non-controlling interests |
|
(4,238,951) |
|
(2,957,041) |
|
|
(Loss)/profit for the for year |
|
(9,455,585) |
|
6,219,723 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive (loss)/profit for the year attributable to: |
|
|
|
|
|
|
The equity holders of the parent entity |
|
(5,497,371) |
|
8,723,047 |
|
|
Non-controlling interests |
|
(4,238,951) |
|
(2,957,041) |
|
|
|
|
(9,736,322) |
|
5,766,006 |
|
|
|
|
|
|
|
|
|
(Loss)/profit per share - from continuing operations (HK$)
|
|
|
|
|
|
|
Basic |
|
(0.06) |
|
0.11 |
|
MiLOC Group Limited
Consolidated Statement of Financial Position
As of 31 December 2021
|
|
|
|
|
As at 31 December 2021 |
|
As at 31 December 2020 |
|
|
|
|
|
HK$ |
|
HK$ |
|
Assets |
|
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
|
Fixed assets |
|
|
|
53,872 |
|
365,788 |
|
Other intangible assets |
|
|
|
2,857,142 |
|
3,214,285 |
|
Right-of-use assets |
|
|
|
185,826 |
|
2,370,463 |
|
|
|
|
|
3,096,840 |
|
5,950,536 |
|
Current assets |
|
|
|
|
|
|
|
Inventories |
|
|
|
- |
|
4,393,462 |
|
Trade receivables |
|
|
|
495,904 |
|
376,798 |
|
Other receivables and prepayments |
|
|
|
976,100 |
|
2,111,512 |
|
Cash and cash equivalents |
|
|
|
435,836 |
|
234,118 |
|
|
|
|
|
1,907,840 |
|
7,115,890 |
|
Total assets |
|
|
|
5,004,680 |
|
13,066,426 |
|
|
|
|
|
|
|
|
|
Equity and liabilities |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
Share capital |
|
|
|
666,358 |
|
656,981 |
|
Share premium |
|
|
|
96,546,867 |
|
92,908,360 |
|
Retained earnings |
|
|
|
(136,983,820) |
|
(131,486,449) |
|
Equity attributable to the parent entity |
|
|
|
(39,770,595) |
|
(37,921,108) |
|
Non-controlling interests |
|
|
|
(289,136) |
|
3,949,815 |
|
Total equity |
|
|
|
(40,059,731) |
|
(33,971,293) |
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
Trade payables |
|
|
|
4,835,437 |
|
7,209,544 |
|
Other payables and accruals |
|
|
|
30,824,176 |
|
28,365,680 |
|
Amounts due to directors |
|
|
|
3,899,385 |
|
3,444,748 |
|
Lease liabilities - right-of-use assets |
|
|
|
348,808 |
|
2,679,127 |
|
Borrowings |
|
|
|
5,156,605 |
|
5,338,620 |
|
|
|
|
|
45,064,411 |
|
47,037,719 |
|
Non-current liabilities |
|
|
|
|
|
|
|
Lease liabilities - right-of-use assets |
|
|
|
- |
|
- |
|
Total liabilities |
|
|
|
45,064,411 |
|
47,037,719 |
|
Total equity and liabilities |
|
|
|
5,004,680 |
|
13,066,426 |
MiLOC Group Limited
Consolidated Statement of Cash Flows
For the year ended 31 December 2021
|
|
|
As at 31 December 2021 |
|
As at 31 December 2020 |
|
|
|
HK$ |
|
HK$ |
|
|
|
|
|
|
|
OPERATING ACTIVITIES |
|
|
|
|
|
Cash used in operations |
|
(188,879) |
|
2,448,816 |
|
|
|
|
|
|
|
INVESTING ACTIVITIES |
|
|
|
|
|
Purchase of fixed assets |
|
- |
|
(42,735) |
|
Interest received |
|
460 |
|
314 |
|
|
|
|
|
|
|
Net cash used in investing activities |
|
460 |
|
(42,421) |
|
|
|
|
|
|
|
FINANCING ACTIVITIES |
|
|
|
|
|
Issuance of shares |
|
3,647,884 |
|
1,513,981 |
|
Proceed received for incorporation of a subsidiary |
|
- |
|
40 |
|
Repayment on leases |
|
(2,708,303) |
|
(3,358,585) |
|
Interest paid |
|
(548,809) |
|
(403,640) |
|
|
|
|
|
|
|
Net cash generated from financing activities |
|
390,772 |
|
(2,248,204) |
|
|
|
|
|
|
|
Net increase in cash and cash equivalents |
|
202,353 |
|
158,191 |
|
|
|
|
|
|
|
Cash and cash equivalents at beginning of year |
|
234,118 |
|
86,975 |
|
Effects of currency translation on cash and cash equivalents |
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at end of year |
|
435,836 |
|
234,118 |
|
|
|
|
|
|
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