WALG Walcom Group Limited

 
TIDMWALG 
 
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"). 
 
                                                                   15 June 2020 
 
                             WALCOM GROUP LIMITED 
                          ("Walcom" or "the Company") 
 
                                Trading Update 
 
The Board of Walcom provides an update on revenues for the year ended 31 
December 2019, current trading and its working capital position. 
 
2019 Revenue 
 
The Company has announced previously that its operations during the 2019 
financial year were adversely affected by the effects of African Swine 
Influenza on customer orders in its key market of China.  As a result, the 
Board of the Company currently anticipates that revenues for the year ended 31 
December 2019 will be approximately HK$15.1m (2018: HK$34.7m), though the 
Company's results remain subject to audit. 
 
Current Trading 
 
The Company has seen a gradual recovery of the swine market in China, whereby 
most of its customers have re-commenced ordering the Company's swine feed 
products. Whilst the quantity per order is smaller than before, the Company has 
observed a trend of more regular orders from customers. The Board is cautiously 
optimistic that sales of swine products in China will continue and hopefully 
accelerate during the fourth quarter of the current financial year. 
 
Due to the combined effect of African Swine Influenza and COVID-19, Walcom has 
experienced a significant reduction in sales of its products in markets outside 
China which the Board expects will continue until the final quarter of the 
current financial year. 
 
The Company continues to develop its products for dairy cows in China, and the 
Board anticipates that sales of these products will begin during Q4 2020. 
 
Working Capital Position 
 
Mr Francis Chi, Chief Executive of the Company, has still been unable to 
provide the proposed loan of HK$1,230,000 (the "Director Loan") to the Company 
as intended. Mr Chi has, again, reiterated his intention to provide the 
Director Loan but there can be no certainty as to the provision or the timing 
of the Director Loan. 
 
Further to the announcement on 5 June 2020, the Company has  extended its 
payment plan with its bank in relation to a loan which was due for repayment at 
the end of May 2020. Under the revised payment scheme, the Company is required 
to repay RMB150,000 by 19 June 2020, with a further six monthly instalments of 
RMB50,000 being payable commencing in July 2020. 
 
The Company will require additional funding to satisfy the loan repayment due 
on 19 June 2020. Therefore, based on Walcom's current cash flow projections, 
the Company will be able to continue operations until 19 June 2020. In the 
absence of the Director Loan now being received in part or in full by this 
date, the Company would be unable to continue its operations and would be 
forced into liquidation with a consequential diminution in value to 
shareholders. 
 
Further announcements will be made in due course. 
 
Further enquiries: 
 
Walcom Group Limited                                           +852 2494 0133 
Francis Chi (Chief Executive Officer/Chief Financial 
Officer) 
 
 
Allenby Capital Limited (Nominated Adviser and Broker)       +44 20 3328 5656 
David Hart / Asha Chotai 
 
 
 
END 
 

(END) Dow Jones Newswires

June 15, 2020 02:37 ET (06:37 GMT)

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