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")
4 June
2019
WALCOM GROUP
LIMITED
(“Walcom” or “the
Company”)
Company update
Appointment of
Deputy Chief Financial Officer
Further to the Company’s announcement on 7 May 2019, the Company provides the following
update.
Trading Update
As previously announced, Walcom’s trading performance in 2018
and in the early part of the current financial year has been
impacted by the effects of African swine fever in China, one of the Company’s main markets. The
Company notes that it has not lost any major customers to
competitors and that the decline in sales is a direct effect of the
severe reduction in the swine population. As a result, the Company
expects revenues for the first half of 2019 to be substantially
below those achieved in the same period in 2018.
The Company is actively working to increase its customer base
and is hopeful that trading conditions in this market will improve
in the second half of the year. In addition, the Company is
also focusing on increasing sales penetration within the poultry
feed sector and is hopeful it will see the benefit of this in the
fourth quarter of the financial year.
Overdue customer receivable
As previously announced, the Group’s largest customer in
China (the “Customer”), a sizable
listed company, defaulted on paying large overdue trade receivables
owed to the Company. Whilst some of outstanding amount was received
initially from the Customer, there have been no further payments
received such that the current amount due from the Customer is
approximately HK$5.4 million. The
Company commenced legal proceedings against the Customer to recover
the debt and these legal proceedings against the Customer are
ongoing. However, at present it remains unclear as to when
and how much of this overdue amount will be recovered. The Company
expects to receive an update on the outcome of the legal
proceedings in the coming weeks.
Loan update
Walcom has a bank loan of RMB1.5
million (approximately HK$1.8
million) which is due for review and repayment by
10 June 2019. The Company has been in
discussions with the bank which provided the loan and it has
agreed, in principle, that shortly after the repayment of the
RMB1.5 million loan, the bank will
issue a new loan of RMB1.0 million,
due for review and repayment six months after drawdown but
otherwise on the same terms. In addition, the bank has agreed
in principle to issue of a further loan of RMB0.5m should the Company’s trading
stabilise.
In conjunction with the expected improvement in trading, the
issue of the new RMB1.0 million loan
will be used to ease the Group’s working capital position in the
short term, with the Board now expecting that it will enable the
Group to meet its liabilities as they fall due until at least the
end of August 2019. The Group
continues to closely monitor its working capital position and
continues to seek further investment in the business to safeguard
its liquidity.
Further announcements will be made in due course.
Appointment of Deputy Chief Financial
Officer
The Company is pleased to announce the appointment of Ms
Hwai Ming Chan (Jessie) as non-board
Deputy Chief Financial Officer, effective from 1 June 2019. As announced on 14 December 2018, Mr Albert SF Wong resigned as a
director of the Company and remains as non-board Chief Financial
Officer and Company Secretary until 1 July
2019, following which Mr Francis
Chi will assume the additional role of interim Chief
Financial Officer and Ms Chan the additional role of Company
Secretary. It is intended that Ms Chan will become Walcom’s
Chief Financial Officer in due course and a further announcement
will be made in that regard at the appropriate time.
Ms Chan has approximately 20 years of experience in the
financial industry. She is a qualified accountant by training and a
member of both CPA Australia and the Malaysian Institute of
Accountants. Ms Chan has worked in the areas of auditing and
corporate finance in Malaysia and
China and was previously an
Associate Director at an investment bank specialising in large IPOs
and fundraising projects in Asia
and has significant experience working with listed companies in the
region.
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 |