The information
contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse
Regulations (EU) No. 596/2014 ("MAR")
21 November
2018
WALCOM GROUP
LIMITED
(“Walcom” or “the
Company”)
Further re
Customer Payment
Trading Update
Further to the announcement on 8 October
2018, the Company provides an update on the default on
payments owed to the Company of an aggregate RMB 4.96 million (approximately £556,000) by the
Company’s largest customer (the “Customer”). The Company has still
not received payment of the outstanding amount, and therefore has
recommenced legal proceedings against the Customer to recover the
contractual monies due.
The Company also provides an update on its current trading and
market conditions. The African swine fever epidemic on pigs has
affected most provinces in China
including those in which the Company operates. This has had an
adverse effect on trading, and the Directors now expect revenue for
the current financial year to be significantly lower than the
previous financial year. This reduction in revenue, in conjunction
with the impact of the default on payments owed by the Customer,
are likely to lead to the Company’s loss before tax for the current
financial year being significantly higher than that for the 2017
financial year.
As at 31 October 2018, the Company
had cash at bank of approximately HK$ 4
million. Subsequent to this, the Company has repaid a
short-term bank loan of RMB 2 million
in accordance with its terms and is in discussions with the same
lender regarding an additional facility. The Company has also
agreed that the secured three-year RMB 2
million revolving credit facility in place via the Company’s
wholly owned subsidiary, Shanghai Walcom Bio-Chem Co., Ltd, will be
repaid on a quarterly basis commencing in January 2019.
As previously announced, the Company’s working capital position
is significantly restrained but manageable in the near
term. However, if the full amount outstanding from the
Customer is not received or the Company is not able to secure the
alternative financing arrangement with its lender highlighted
above, or any similar alternative arrangement, the Company may be
in a position where it is unable to settle its liabilities as and
when they fall due. The Company continues to monitor closely its
cash position.
Further announcements will be made in due course.
Further enquiries:
Walcom Group Limited
Francis Chi (Chief Executive Officer)
Albert Wong (Chief Financial Officer) |
+852 2494 0133 |
Allenby Capital Limited
David Hart / Asha Chotai |
+44 20 3328 5656 |