Medilink-Global UK Ltd : Half-Yearly Report For The Six Months To 30 June 2011 (PDF, 79.88 KB)

28 September 2011

MediLink-Global UK Limited

("MediLink" or "the Company")

HALF-YEARLY REPORT FOR THE SIX MONTHS TO 30 JUNE 2011

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 2011.

Financial highlights

• Revenue increased by 13% to £871,000 (H1 2010: £769,000);

• Revenue contribution from Singapore operations was £296,000 (H1 2009: £264,000);

and

• Operating loss of £622,000 (H1 2010: £330,000 operating loss), mainly attributable to costs of expansion in China and slower than anticipated enrolment of new members in China.

Operational highlights

o On 1 January 2011, the Company renewed the contract with ING Employee Benefits Sdn Bhd (“INGEB”) for a further five year period up to 31 December 2015. Estimated value of the renewal is RM5 million (approximately £1 million).

o On 14 February 2011, the Company entered into a three year contract with Ping An

Health Insurance Company Ltd.

o The Company launched a new service offering Medical Tourism programs in

Malaysia.

Enquiries:

MediLink-Global UK Limited Tel: [phone]

Shia Kok Fat, Chief Executive Officer

Allenby Capital Limited Tel: [phone]

Nick Athanas

James Reeve

Daniel Stewart & Company Plc Tel: [phone]

Antony Legge

www.medilink-global.com

CHAIRMAN’S STATEMENT

Medilink is pleased to present the Group's unaudited results for the six month period ended 30

June 2011.

FINANCIAL REVIEW

The Group recorded revenues of £871,000 (H1 2010: £769,000) and a loss after tax of £622,000 (H1 2010: £334,000) for the six months ended 30 June 2011. Revenues have increased by 13% over the same period last year mainly due to the overall growth of the Group’s operations. Revenue from China, Malaysia and Singapore increased by 18%, 6%and 14% respectively. The Malaysian operating entities continued to make the largest contribution of 45% (H1 2010: 46%) of the Group revenue’s for the period under review, whilst China and Singapore contributed 20% (H1 2010: 20%) and 35% (H1 2010: 34%) respectively. The operating loss for the period was higher compared to the same period last year as a result of the increase in manpower cost in China and Malaysia, which is in line with the expansion plan put in place. The loss for the period under review was exacerbated by an unrealised foreign exchange loss for of £89,000 (H1 2010: Nil).

PERIOD IN FOCUS

For the first half of 2011, member enrollment in China had increased but was lower than expected which led to a modest increase in revenue of 18% over the same period last year, from £151,000 to £175,000. However, the China operation suffered a higher loss compared to the same period last year due to an increase in manpower cost in the first half of 2011. Medilink China signed up agreements with a further two insurance companies during the six months to June 2011 and are now contracted to serve 15 prominent insurance companies and 1 corporate client in the region compared with 11 insurance companies at the same stage last year. The management is anticipating higher revenue growth and no significant increase in operating cost in the second half of 2011.

The increase in revenue from Malaysia and Singapore operations compared with the same period of last year was due to the continuous growth in member enrollment. However, a higher loss was recorded as the result of the increase in manpower cost in Malaysia.

PROSPECTS

The Directors remain cautiously optimistic about the Group’s prospects in the second half of 2011 and are pleased with the growth experienced in Malaysia and Singapore. However, as a result of the slower than anticipated enrollment of new members in China the Directors’ current expectation is that the financial performance for the full year may fall materially behind their previous expectations.

The lower than expected revenues in the first half has led to a reduction in cash and working capital resources and the Company is currently in discussions with key shareholders regarding access to new funding.

Norman Lott

Chairman

Consolidated Statement of Comprehensive IncomePeriod ended 30 June 2011Period Period YearEnded30.06.11Ended30.06.10Ended31.12.10Unaudited Unaudited AuditedNote £'000 £'000 £'000

Revenue 5 871 769 1,786

Cost of sales (646) (500) (1,157)

Gross profit 225 269 629

Other income / (expense) (89) 4 114

Administrative expenses (749) (603) (1,395)

Operating loss (613) (330) (652)

Share of associated undertakings' losses - (10) (33) Finance expenses (9) (3) (11)

Loss before taxation (622) (343) (696)

Taxation 4 - 9 10

Loss after taxation and for the period (622) (334) (686)Other Comprehensive Income

Exchange differences on translating

foreign operations 14 (58) (41)

Total comprehensive income for the period

net of tax (608) (392) (727)

Loss per share (pence)
Basic	2	(0.52)	(0.43)	(0.64)
Diluted*	2	(0.52)	(0.43)	(0.64)

* In accordance with IAS33 "Earnings per share" and where the Group has reported a loss for the period, the shares are not dilutive. The Group has not issued any instrument with dilutive effect.

Consolidated Statement of Financial PositionAs at 30 June 201130.06.11 30.06.10 31.12.10ASSETSNon-current assetsNote Unaudited Unaudited Audited£'000 £'000 £'000

Intangible assets 4,286 4,357 4,329

Property, plant and equipment 255 223 283

Investments - 7 - Loans and other financial assets 350 - 313

Total non-current assets 4,891 4,587 4,925Current assets

Trade and other receivables 936 964 1,146

Cash and cash equivalents 453 461 880

Total current assets 1,389 1,425 2,026TOTAL ASSETS 6,280 6,012 6,951EQUITYCapital and Reserves

Share capital 6 5,946 5,282 5,946

Share premium account 6 1,502 951 1,502

Reserves (2,243) (1,301) (1,636)

Total equity 5,205 4,932 5,812Current liabilities

Trade and other payables 1.013 1,008 1,076

Borrowings - 7 -

Total current liabilities 1,013 1,015 1,076Non-current liabilities

Other payables 15 18 16

Deferred tax liabilities 47 47 47

Total non-current liabilities 62 65 63TOTAL EQUITY AND LIABILITIES 6,280 6,012 6,951Consolidated Statement of Cash FlowsSix months ended 30 June 2011Cash flows from operating activities30.06.11 30.06.10 31.12.10Unaudited Unaudited Audited£'000 £'000 £'000

Loss before taxation (622) (343) (696)

Adjustments for:

Amortisation of intangible assets 42 56 84

Depreciation of property, plant and equipment 82 82 166

Gain on disposal of property, plant and equipment - - (5) Share of loss of associated company - 10 33

Finance costs 9 3 11

Cash from operating activities before changes in working capital

(489) (192) (407)

Decrease/ (increase) in trade and other receivables 172 (180) (699) Increase/(decrease) in trade and other payables (126) 344 58

Cash flows from operations (443) (28) (1,048)

Tax paid (2) - (8) Interest paid (9) (3) (11) Net cash used in operations (454) (31) (1,067)

Investing activities

Purchase of property, plant and equipment (65) (62) (144) Proceed from disposal of property, plant and equipment - 15 19

Net cash used in investing activities (65) (47) (125)Financing activities

Proceeds from issue of shares - 321 1,648

Share issue costs - (18) (130) Proceed from borrowing from a shareholder 83 - 308

Repayment made to director (15) - (14) Repayment of bank borrowings - (9) (14) Repayment of hire purchase liabilities (7) (12) (15) Net cash generated by/(used in) financing activities 61 282 1,783

Net (decrease)/ increase in cash and cash equivalents

(458) 204 591

Effect of exchange rate changes 31 (58) (26)

Cash and cash equivalents at the beginning of theperiod 880 315 315 Cash and cash equivalents at the end of the period 453 461 880Consolidated Statement of Changes in Shareholder’ EquityFor the six month period ended 30 June 2011 (unaudited)Share ShareForeignexchange Retainedcapital premium reserve earnings Total£’000 £’000 £’000 £’000 £’000Balance as at 1 January 2010 5,193 737 (34) (875) 5,021

Loss for the period - - - (334) (334) Exchange differences - - (58) - (58) Total comprehensive income for

the period - - (58) (334) (392) Issue of shares 89 232 - - 321

Share issue costs - (18) - - (18)

Balance as at 30 June 2010 5,282 951 (92) (1,209) 4,932

Balance as at 1 July 2010 Loss for the period	-	-	-	(352)	(352)
Exchange differences	-	-	17	-	17
Total comprehensive income for the period	-	-	17	(352)	(335)
Issue of shares	664	663	-	-	1,327

Share issue costs - (112) - - (112)

Balance as at 31 December 2010 5,946 1,502 (75) (1,561) 5,812

Balance as at 1 January 2011
Loss for the period	- - -	(622)	(622)
Exchange differences	- - 14	-	14
Total comprehensive income for the

period - - 14 (622) (608)

Balance as at 30 June 2011 5,946 1,502 (61) (2,183) 5,204 Notes to the Interim Financial InformationPeriod ended 30 June 20111 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 those the group expects to apply in its financial statements for the year ending 31 December 2011 and are unchanged from those disclosed in the group's Report and Financial Statements for the year ended 31 December 2010.

The interim results have not been reviewed nor audited by the Company's auditors. The comparatives for the period ended 31 December 2010 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 financial information set out in this announcement was approved by the board on 27

September 2010.

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 diluted

Period ended30.06.11£'000 (unaudited)Period ended30.06.10£'000 (unaudited)Year ended31.12.10£'000 (audited)

Loss after taxation (622) (334) (686)

Basic weighted average shares in issue 118,920,280 104,247,178 107,189,696

Diluted weighted average shares in issue 118,920,280 104,247,178 107,189,696

Basic loss per share based on issued share capital

as at end of period (pence) (0.52) (0.32) (0.64)

Diluted loss per share based on issued share capital

as at end of period (pence) (0.52) (0.32) (0.64)

3 Dividend

The Directors do not propose a dividend in the period.

4 Taxation

The interim tax credit reflects an estimate of the likely effective tax rate for the period.

5 Turnover and segmental analysis

The Group has adopted IFRS 8 Operating Segments with effect from 1 January 2009. 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

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.

30 June 2011 (unaudited)Third party administratorSoftwarelicensing Consolidation Total£'000 £'000 £'000 £'000

External revenue 832 39 871

Internal revenue - 37 (37) - Total revenue 832 76 (37) 871

Interest expenses (9) - (9) Depreciation and amortisation (112) (12) - (124) Corporation tax - - - - Earning before tax (EBT) (595) (27) (622)

Assets 11,152 345 (5,217) 6,280

Liabilities (3,896) (302) 3,123 (1,075)

(i) The assets of third party administrator are including the goodwill on consolidation of

£4,138,000.

Revenues from two customers amounted to £244,000 : ING Insurance Bhd £158,000 and AXA Insurance Bhd £86,000 (1H 2010: £184,000: ING Insurance Bhd £113,000 and AXA Insurance Bhd £71,000), arising from sales by third party administrator segment.

30 June 2010 (unaudited)Third party administratorSoftwarelicensing Consolidation Total£'000 £'000 £'000 £'000

External revenue 746 23 769

Internal revenue - 47 (47) -

Total revenue 746 70 (47) 769

Interest expenses (3) - - (3) Depreciation and amortisation (126) (12) - (138) Corporation tax 9 - - 9

Earning before tax (EBT) (294) (49) - (343)

Assets 9,474 321 (3,783) 6,012

Liabilities (3,333) (291) 2,544 (1,080)

(i) The assets of third party administrator are including the goodwill on consolidation of

£4,138,000.

31 December 2010 (audited)Third partyadministratorSoftwarelicensing Consolidation Total£'000 £'000 £'000 £'000

External revenue 1,096 147 - 1,243

Internal revenue - 69 (69) - Total revenue 1,096 216 (69) 1,243

Interest revenue 1 - - 1

Interest expenses (3) - - (3) Depreciation and amortisation (196) (21) - (217) Corporation tax 17 1 - 18

Earning before tax (EBT) (932) (10) - (942)

Assets 7,766 250 (2,251) 5,765

Liabilities (1,935) (176) 1,367 (744)

(ii) The assets of third party administrator are including the goodwill on consolidation of

£4,138,000.

Revenues from two customers amounted to £349,000 : ING Insurance Bhd £204,000 and

AXA Insurance Bhd £145,000, arising from sales by third party administrator segment.

The geographical split of revenue and non-current assets arises as follows:

30 June 2011 (unaudited)	Jersey £'000	Singapore £'000	China £'000	Malaysia £'000	Total £'000
Revenue	-	308	175	388	871
Intangible assets	149	-	-	-	149
Goodwill	4,138	-	-	-	4,138

PPE - 20 101 134 255

30 June 2010 (unaudited)	Jersey	Singapore	China	Malaysia	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	-	264	151	354	769
Intangible assets	219	-	-	-	219
Goodwill	4,138	-	-	-	4,138

PPE - 24 68 131 223

31 Dec 2010 (audited)	Jersey	Singapore	China	Malaysia	Total
	£'000	£'000	£'000	£'000	£'000
Revenue	-	629	311	846	1,786
Intangible assets	275	-	-	-	275
Goodwill	4,138	-	-	-	4,138

PPE - 21 44 171 236

6 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):PeriodPeriod Period endedended 30June 2011ended 30June 201031 December2010

Authorised:

£'000 £'000 £'000

200,000,000 Ordinary shares of 5p each 10,000 10,000 10,000

Issued:

118,920,280 Ordinary shares of 5p each 5,946 5,946

105,650,280 Ordinary shares of 5p each 5,282

7 Foreign currency exchange rate

The following significant exchange rates applied during the period:

	Average Rate	Reporting Date
£1 : RMB	10.5561	10.6731
£1 : SGD	2.0320	2.0332
£1 : RM	4.8771	4.9530

8 Nature of financial information

These interim results will be available shortly on the Company's website, www.medilink- global.comin accordance with the AIM Rules. Further copies can be obtained from the registered office at 31 Pier Road, St. Helier, Jersey, JE4 8PW.

- Ends -