TIDMMEDI
RNS Number : 8277A
Medilink-Global UK Limited
01 October 2015
1 October 2015
MediLink-Global UK Limited
("MediLink" or "the Company")
HALF-YEARLY REPORT for the six months to 30 june 2015
MediLink, the provider of electronic healthcard network services
to insurance companies and corporate organisations to 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 GBP704,000 (H1 2014: GBP688,000);
-- Revenue contribution from Malaysia operations increased by
4.6% to GBP412,000 (H1 2014: GBP394,000);
-- Operating loss for continuing operations reduced by 11% to
GBP112,000 (H1 2014: GBP126,000); 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 Nick Athanas
Officer
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 the Group'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 GBP708,000 (H1 2014: GBP688,000)
and a reduced loss after tax of GBP112,000 (H1 2014: GBP126,000)
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 GBP394,000 in the first half of last year to
GBP412,000 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 GBP292,000 (2014: GBP294,000) 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 Ended Ended
30.06.15 30.06.14 31.12.14
Unaudited Unaudited Audited
Note GBP'000 GBP'000 GBP'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:
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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)
Basic and Diluted 2 (0.15) (0.17) (1.64)
Loss per ordinary share for
continuing Ordinary Share (pence)
Basic and 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
GBP'000 GBP'000 GBP'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
GBP'000 GBP'000 GBP'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 144 15 44
Interest paid - - 1
Net cash used in operations 144 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 (9) (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 Share Exchange Retained Total Non-Controlling Total
capital Premium Reserves Earnings Interest
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'000 GBP'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
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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 Period ended Year ended
30.06.15 30.06.14 31.12.14
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (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 GBP1.00) (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 Period ended Year ended
30.06.15 30.06.14 31.12.14
GBP'000 GBP'000 GBP'000
(unaudited) (unaudited) (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
GBP'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
GBP'000
Operating 218
Investing (3)
Financing (244)
-------------
Net cash inflow / (outflow) (29)
-------------
Loss per share from discontinued operations Year ended Year ended
30.06.2015 31.12.2014
GBP'000 GBP'000
(unaudited) (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
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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.
Third party Software
30 June 2015 (unaudited) administrator licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'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 GBP1,338,000.
Revenues from the Group's major customer AIA Bhd amounted to
GBP276,621: (H1 2014: GBP282,485) arising from sales in the third
party administrator segment.
Third party Software
30 June 2014 (unaudited) administration licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'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 GBP3,038,000.
Third party Software
31 December 2014 (audited) administration licensing Consolidation Total
GBP'000 GBP'000 GBP'000 GBP'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 GBP1,338,000 (2013: GBP3,038,000)
Revenues from customers amounted to GBP263,249: AIA Bhd
(Previously known as ING Insurance Bhd) compared with year 2013:
GBP243,685: 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 Malaysia Total
Operation
(China
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 292 - 412 704
Intangible assets - - - 147 147
Goodwill 1,338 - - - 1,338
PPE - - - 71 71
-------- ------------------ -------------- ----------- --------
30 June 2014 (unaudited) Jersey Singapore Discontinued Malaysia Total
Operation
(China
GBP'000 GBP'000 GBP'000 GBP'000 GBP'000
Revenue - 294 - 394 688
Intangible assets - - - 96 96
Goodwill 3,038 - - - 3,038
PPE - - - 133 133
-------- ------------------ -------------- ----------- --------
31 Dec 2014 (audited) Jersey Singapore Discontinued Malaysia Total
Operation
(China
GBP'000 GBP'000 GBP'000 GBP'000 GBP'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 30 June 31 December
2015 2014 2014
GBP'000 GBP'000 GBP'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
------------- ------------- ---------------
GBP1 : RMB 9.6783 9.5700
------------- ------------- ---------------
GBP1 : SGD 2.0636 2.1222
------------- ------------- ---------------
GBP1 : MYR 5.5890 5.9345
------------- ------------- ---------------
GBP1 : 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
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