STAR COMBO PHARMA LIMITED For personal use only
STAR COMBO PHARMA LTD AND CONTROLLED ENTITIES
ABN 39 615 728 375
APPENDIX 4D
HALF YEARLY REPORT
FOR THE HALF YEAR ENDED 31 DECEMBER 2021
TABLE OF CONTENTS
Appendix 4D half year report
Directors' report
Auditor's independence declaration
Financial statements
Directors' declaration
Independent auditor's review report
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4
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For personal use only
STAR COMBO PHARMA LTD AND CONTROLLED ENTITIES | ||||
APPENDIX 4D HALF YEAR REPORT | ||||
Under ASX Listing Rule 4.2A | ||||
For the half year ended 31 December 2021 | ||||
1. Company details | ||||
Name of entity: | STAR COMBO PHARMA LTD AND CONTROLLED ENTITY | |||
ABN: | 38 615 728 375 | |||
Current period: | 1 July 2020 to 31 December 2021 | |||
Previous corresponding period: 1 July 2019 to 31 December 2020 | ||||
2. Results for announcement to the market | ||||
Half year ended | Half year ended | Change | ||
31 December 2021 | 31 December 2020 | % | ||
$ | $ | |||
Revenue | 11,774,235 | 14,671,568 | -20% | |
Operating profit/(loss) after tax from ordinary activities attributable to | (997) | 530,397 | -100% | |
owners | ||||
Total comprehensive income attributable to the shareholders of Star | 6,476 | 514,931 | -99% | |
Combo Pharma Limited |
For further commentary on the results for the period please refer to the attached Directors' Report and Financial Statements including the Notes to the Financial Statements lodged with the ASX.
3. Dividends
The directors have recommended that no dividend was paid for the period.
4. Net tangible assets per ordinary share | ||||
31 December | 31 December | |||
2021 | 2020 | |||
$ | $ | |||
Net asset backing per ordinary share | $ | 0.268 | $ | 0.331 |
Net tangible asset backing per ordinary share | $ | 0.251 | $ | 0.264 |
Star Combo Pharma Limited | Half Year Report December 2021 | Page | 2 |
STAR COMBO PHARMA LTD AND CONTROLLED ENTITIES APPENDIX 4D HALF YEAR REPORT
For the half year ended 31 December 2021
For personal use only
5. Audit
This report is based on accounts that have been subject to review.
6. Investments in associates and joint ventures
Not applicable.
Signed By:
Richard Allely - Chairman
23 February 2022
___________________________________________________________________________________________________
Star Combo Pharma Limited | Half Year Report December 2021 | Page | 3 |
STAR COMBO PHARMA LTD (ABN: 39 615 728 375) AND CONTROLLED ENTITIES
DIRECTORS' REPORT
Your directors present their report on the consolidated entity (referred to herein as the Group) consisting of Star Combo Pharma Limited and its controlled entities for the Half Year ended 31 December 2021.
onlyDirectors
The following persons were directors of the Group during the period and until the date of this report:
Non-executive Chairman - Mr Richard Allely
Executive Director - Mr Jinxing Zhang
Executive Director - Miss Su Zhang
Non-executive Director - Dr Ziye Sui
Non-executive Director - Ms Wei Han
Non-executive Director - Mr Jialong Ding
usePrincipal Activities
The principal activities of the Group during the half year period were the manufacture and distribution of health food products and nutritional supplements. No significant change in the nature of the Group activities occurred during the period.
Review of operations
personalDuring the half , Star Combo continued to grow the manufacturing business securing new clients and expanding existing relationships, with increased order books and new products being developed to fulfil orders. The OEM division performed strongly and aligned to expectations, OEM revenue totalled $5.03M in 1H22 up 32.4% compared with the same period last year (1H21 $3.8M). Group revenue was $12.4M for the half (1H21 $15.9M).
The group incurred a loss after income tax of $1.0k compared to a profit after income tax of $530.4k in the prior comparable period ("pcp").
The most significant reason for the deterioriation in the group financial performance is the continuing impact of COVID-19 on the retail and online business.
Offsetting this is a strong growth in Star Combo revenue particularly in the OEM sector and savings in marketing and administration and other costs.
The following table shows the movement in group revenues from 1HFY21 to 1HFY22:
Sector Name
ForManufacturing Sales Revenue - OEM
Manufacturing Sales Revenue - Own brands and other
Retail Sales - Austoyou and Koala Mall
Interest and Other Revenue
Total Group Sales and Other Revenue
As the Company's manufacturing division continued to grow, Star Combo received its largest OEM order to date for $5.0M from a leading Australian health supplement brand. The order was for the manufacture of approximately 290 million bulk capsules to be completed by the end of the third quarter of FY22.
Star Combo Pharma Limited | Half Year Report December 2021 | Page | 4 |
STAR COMBO PHARMA LTD (ABN: 39 615 728 375) AND CONTROLLED ENTITIES
DIRECTORS' REPORT
Additionally, Star Combo's relationship with Terry White Chemmart (TWC) continued to strengthen. Star Combo has developed a number of new supplement formulations with two new products to be launched within TWC channels. Star onlyCombo has also commenced working with TWC's Personal Care business and the Company will supply five Living Healthy
supplement products in bulk capsule, for the division to use in its individual client supplement program.
In October Star Combo received a new order for $0.5M with Chemist Warehouse as the relationship continues to strengthen. The total order book value with Chemist Warehouse is now $1.5M for financial year 2022.
New opportunities opened-up overseas in the half with Star Combo signing a 12-month exclusive distribution agreement with leading Vietnamese distributor Happy Co Ltd. The agreement is for the sale and distribution of the Company's proprietary health supplement product line, Costar, throughout Vietnam. The agreement has a minimum order quantity useof $1.0M and provides Star Combo with direct access to the growing Vietnamese market via Happy Co's well established and extensive distribution channels. Vietnam's health supplement market is estimated to be worth circa $800M and is
growing rapidly due to an increasing middle class and an aging population.
Supply chain limitations which have arisen due to COVID related events, restricted the pace at which the Company could execute some orders.
The Company's retail division (Austoyou.com and Koala Mall) continues to be affected by the COVID-19 environment, and its impact on customer behavior and supply chains. The Daigou market has all but disappeared and international visitation has stopped. New South Wales, being the main place of the operation for the business has been in lockdowns for over
personalthree months during the period. Previous expectations of the renewal of Retail revenues at the end of the "COVID pandemic" have not come to fruition in the first half of 2022.
During the period the Company continued its two significant capital projects being development of the site at 165 Woodpark Road and the expansion and upgrade of facilities at 171 Woodpark Road.
Start Combo received approval from the Cumberland City council for its Development Application at 165 Woodpark Road, Smithfield, New South Wales in September. The site will host a multi-level complex and purpose-built R&D and Test Laboratory Facility, and once complete will enable Star Combo to extend its service offering and support their existing OEM customers. It will significantly enhance the Company's capability to develop new and innovative products to address the growing demand in both local and overseas markets for vitamins and dietary supplements.
The Company also applied for TGA approval to extend the scope of its existing manufacturing license to cover building
3 at 171-177 Woodpark Road Smithfield. TGA approval was granted in late November after a rigorous inspection process. The approval means that the building can be used for storage of TGA manufactured products at the site, increasing the Company's production capacity.
Star Combo is making good progress on its site update and expansion to its manufacturing facilities at 171 Woodpark Road. The Company expects the expansion of the facilities to be completed this year.
ForThe material reduction in Interest and Other Revenue year on year reflects reduced Government Covid support and reduced interest rates.
Significant changes in the state of affairs
As indicated above, during the half year, the Company continued two significant development projects. These projects will significantly upgrade the groups manufacturing capabilities and capacity in pursuit of its strategy to become a major OEM supplier.
There have not been any other significant changes in the state of affairs of the group.
Star Combo Pharma Limited | Half Year Report December 2021 | Page | 5 |
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Star Combo Pharma Ltd. published this content on 23 February 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 23 February 2022 05:28:01 UTC.
