WALG.L Regulatory News (WALG)

Walcom Group Ltd - Trading Statement

PR Newswire

London, November 13

13 November 2017

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")

WALCOM GROUP LIMITED

(“Walcom” or “the Company”)

Trading Statement

Walcom today provides an update on its trading. As indicated in the Company’s half-yearly results for the six months ended 30 June 2017, announced on 19 September 2017, the Company has continued to experience challenging trading conditions in PRC during the second half of the financial year.

In addition, as set out in the Company’s half-yearly results, the Company has been looking to increase the revenue generated from the integrated meat producing companies whose businesses include feed milling, pig farming, pig slaughtering and pork product production. Unfortunately, sales into one of the integrated meat producing companies in PRC has not continued as the Company had hoped. However, further tenders are expected in the new year and the board remains optimistic about additional wins in this area.

As a result, revenues generated by Walcom from PRC have and continue to be less than anticipated.

Trading in the Company’s overseas markets has remained consistent and in line with management’s expectations.

Accordingly, the Company expects that Group revenues for the full financial year will be materially less than those achieved in FY16 and as a consequence the Company expects to be loss making for the full year.

The challenging trading conditions in the PRC and associated pressure on accounts receivable in the region, including a material outstanding customer payment owed to the Company, have had a consequential impact on the Company’s cash resources. The Company had cash and cash equivalents as at 31 October 2017 of HK$3.4 million. The Company has negotiated and agreed a new short-term Renminbi bank loan equivalent to HK$2.3 million to replace its existing loan of the same currency and amount, which has been used to finance the Group’s general working capital. Receipt of the new loan and repayment of the existing loan is due to occur in mid-November 2017. The Company will closely monitor its working capital requirements and proposes to seek further bank financing if necessary.

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