WALG.L Regulatory News (WALG)

Walcom Group Ltd - Trading update

PR Newswire

London, February 27

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")

27 February 2019

WALCOM GROUP LIMITED

(“Walcom” or “the Company”)

Trading update

Update on working capital position

Further to the Company’s announcement on 21 November 2018, the Company provides an update on trading and its resultant working capital position.

Trading in the first two months of the financial year has been significantly below budget due to the impact of slower growth in the Chinese economy which has, in conjunction with the continuing impact of African swine fever, affected Walcom’s revenues. In addition, whilst the Company has received RMB 200,000 (approximately £22,573) in relation to the default on payments owed to the Company by its largest customer, the Company has still not received payment of the outstanding amount of an aggregate RMB 4.76 million (approximately £537,233) and therefore is still pursuing its legal proceedings.

As a result of these matters, Walcom’s working capital position is severely constrained such that the Company may not be able to meet its liabilities as they fall due by the end of March 2019. The Company is taking all possible steps to mitigate this position by means of cost savings, negotiating with suppliers on extended payment schedules and other actions the Company could take to generate additional cash resources.

The actions outlined above are subject to a number of variables which are not wholly within the Company’s control. In the event that the Company is unable to address its working capital shortfall, the Company may be unable to continue its operations and may be forced into liquidation with a consequential diminution in value to shareholders.

Further announcements will be made in due course.

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