RE: Rise..8 Sep 2017 14:01
from the half yearly
Overview of the six months ended 30 September 2016
The Group continued to incur a gross loss during the six months ended 30 September 2016, as both the CX2 and CX5 data centres have not yet attained an optimum level of occupancy. Fit-out works for a new tenancy contract are ongoing, but will only start to generate rental revenue in the second half of the 2017 financial year.
The loss before tax for the six month period was RM6.2m (£1.2m*), compared to the profit before tax in the corresponding period in the previous financial year of RM1.8m (£0.3m*). This was mainly due to the inclusion of the following items in the results for the previous six month period:
(i) reversal and utilisation of a provision of onerous lease of RM23.0m (£4.3m*); and
(ii) reversal of impairment of tangible assets of RM13.1m (£2.4m*).
As at 30 September 2016, the Group had cash and cash equivalents of RM42.0m (£7.8m*) (31 March 2016: RM43.6m (£8.1m*)). This represents cash that is available to the Group, and excludes restricted cash items, such as deposits held on behalf of the Company's Employee Benefit Trust.
Progress with the restructuring of the lease rental payments has, to a certain extent, reduced the burden on operating cash flow, thereby allowing the Group to focus on securing new tenancy contracts. The Group has executed a debt settlement agreement with the freeholder of CX1, CX2 and CX5 and is in the process of finalising revised lease agreements. The Board looks forward to making further announcements in respect of formal revised lease agreements as and when appropriate.
Current trading
As highlighted in the Group's results for the year ended 31 March 2016, which were announced in July 2016, the Group remains focused on filling the remaining capacity at its CX2 and CX5 data centres. It has also undertaken a number of strategic initiatives to improve its cash reserves, secure new customers, create additional revenue streams and strive to improve operational efficiency in order to reduce costs.
The Board has also recently undertaken an internal strategic review of the Group's assets and subsidiaries, in order to examine alternative operating structures for the Group's overall business. This process is ongoing.
Outlook
The Board and management team remains focused on its key strategies, as outlined above, and on pursuing the pipeline of potential customers and business alliances. An update will be made to shareholders on this progress in due course.