Source - RNS
RNS Number : 1466L
DagangHalal PLC
29 September 2016
 

29 September 2016

 

DagangHalal plc

("DagangHalal" or the "Company")

 

Interim Results for the six months ended 30 June 2016

 

DagangHalal Plc (the "Company") was incorporated in Jersey on 10 April 2015 as a public limited company. The registered office of the Company is 43-45 La Motte Street, St Helier, Jersey JE4 8SD. The financial information is for the Company and its subsidiaries undertakings (together, the "Group").

 

DagangHalal plc (ISDX: DGHL), the world's first global e-marketplace to address the need for Halal verification, today announces its unaudited interim results for the six months ended 30 June 2016.

 

Financial Highlights

 

 

Six months to 30 June 2016

Six months to 30 June 2015

Revenue (MYR)

3,338,202

2,964,091

Gross Profit (MYR)

2,357,735

2,928,745

Profit / Loss Before Tax (MYR)

(4,490,836)

1,175,834

Profit  / Loss After Tax (MYR)

(4,490,836)

1,335,834

Gross Margin

71%

99%

 

 

 

 

Operational Highlights

·      Successfully raised c.£3.6 million of net proceeds and admitted to the ISDX Growth Market in April 2016

·      Active merchant numbers increased to 4,272 (H1 2015: 3,657)

·      Continued geographical diversification

·      Signed up two more Certification Bodies (CBs) to the Halal Verification Engine (HVE) database taking the total to 40, up from 38 in February 2016

·      Written confirmation received from two additional CBs to use Halal Certificate Management System (HCMS), taking total to 8

·      Appointed Rizal Alang Zari as Chief Financial Officer

 

 

Mohamed Hazli Mohamed Hussain ('Hazli'), Chief Executive Officer of DagangHalal commented: "I'm pleased to report the Group's maiden interim results since its successful admission to the ISDX Growth Market in April this year. We have continued to deliver on our stated strategy: we've increased active merchant numbers for our e-marketplace and diversified geographically, we've added new Certification Bodies to our HVE system and we're looking forward to holding our first carnival for a number of years in Kuala Lumpur in December this year."

 

For further information, please contact:

 

DagangHalal

via FTI Consulting

Mohamed Hazli Mohamed Hussain, Chief Executive Officer

 

 

 

 

 

Arden Partners

+44 (0) 20 7614 5900

James Felix / Patrick Caulfield (Corporate Finance)

 

Optiva Securities

+44 (0)20 3137 1902

Vishal Balasingham

 

 

 

FTI Consulting

+44 (0) 20 3727 1000

Chris Lane / Rob Mindell  / Elena Kalinskaya

 

 

 

 

 

 

 

Chairman's Statement

 

I am pleased to report DagangHalal's maiden interim results since the Group's successful admission to the ISDX Growth Market on 7 April 2016. This marked an important and exciting milestone for DagangHalal and has laid solid foundations to support the Group's future growth. With the net proceeds of approximately £3.6 million (c.MYR 23 million) raised on IPO, the Group intends to accelerate its growth strategy, in particular through expanding its sales and marketing initiatives, and by continuing to diversify geographically.

 

The IPO used up a significant amount of management capacity. However, notwithstanding this, the Group has made much progress in the first six months of 2016. Group revenue for the period was MYR 3.3 million, a 14% increase on the MYR 2.9 million in H1 2015. In line with the stated growth strategy, the Group has invested in sales and marketing activities, particularly in trade fairs, this was the main reason for the fall in gross profit from MYR 2.9 million in H1 2015 to MYR 2.4 million in H1 2016. During the first six months of 2016, the Group incurred a net loss of MYR 4.5 million which was largely due to IPO related listing expenses which amounted to MYR 3.5 million.

 

Strategy

The core objective of the Group is to promote Halal trade business transactions anywhere and anytime. DagangHalal's strategy is fourfold:

 

·      To grow the Group's ecosystem in the existing core market;

·      To expand the Group's activities into new geographies;

·      To increase the number of Halal Certified Bodies (CB) partners; and

·      To further develop the Group's platform, products and proprietary strategy.

 

Operational Highlights

 

E-marketplace, e-commerce and web solutions

 

During the period, the number of active merchants increased to 4,272 (H1 2015: 3,657. This is due to the Group's focus on increasing sales and marketing activities, in particular through trade events

 

In line with the Group's growth strategy, DagangHalal has continued to diversify and grow in new geographies. For the six months ended 30 June 2016, international revenue as a percentage of total revenue rose to 55%, up from 47% in H1 2015. This geographical diversification has been enabled through the Group's successful participation in various trade shows during the period, including Gulf-Food Dubai, FHA Singapore and Foodex Japan.

 

Given the Group's main focus on growing the number of active merchants during the period, the number of merchants opting for additional e-commerce features has remained stable at 50. The Group continues to have 4 master dealer agreements in place.

 

Halal Certificate Repository

 

The Group's focus remains on populating the database in advance of more actively promoting the service in 2017. During the first half of the current financial year, the Group has successfully signed up 2 more Certification Bodies (CBs) to the HVE database. With these new additions, the Group has now signed a total of 40 out of c.120 CBs globally, up from 38 in February 2016.

 

Since inception, over 80,000 certificates have been uploaded to the HVE, up from 60,000 as at 31 March 2016. During the period, the Group received written confirmation from two additional CBs to use HCMS, taking the total to 8 and the Group is working with these CBs towards going live on the system in due course. 

 

 

Halal events, training, education and consultancy business

 

As stated at the time of the Group's admission to the ISDX Growth Market, DagangHalal did not host any carnivals in 2013, 2014 or 2015 due to a switch of focus towards the development of the HVE and HCMS, but with these technologies developed, it now intends to resume hosting its own carnivals going forward. The Group is making arrangements to host a carnival in Kuala Lumpur in December 2016. The carnival is planned to be held at Evolve Concept Mall, Petaling Jaya on 8th - 11th December 2016. In addition to brand building for the Group, the carnival shall provide a platform for our customers to showcase and introduce their halal products to a mass market.  More than 50 merchants are expected to participate in this carnival. The exhibitors/merchants are from various industries, including food & beverages, banking & insurance, telecommunications, personal care products, pharmaceuticals and media.

 

Outlook

The database that we have is unique and the only one of its kind in the world and there are many other possibilities for commercialization. Our focus now is on continuing to execute on the Group's strategy as stated above and the Board remains optimistic about the future prospects of the Group.

 

 

Datuk Hj Muhadzir Mohd Isa

Chairman

 

 

Consolidated Statement of Comprehensive Income

for the period ended 30 June 2016

       

                        

 

 

Proforma

 

Proforma

 

 

(Unaudited)

 

(Unaudited)

 

 

30 June 2016

 

30 June 2015

 

 

 

 

 

 

Note

MYR

 

MYR

 

 

 

 

 

Revenue

 

3,338,202

 

2,964,091

Cost of sales

 

(980,466)

 

(35,346)

Gross profit

 

2,357,735

 

2,928,745

Other income

 

87,939

 

13,499

 

 

 

 

 

General & administrative expenses

 

(3,258,816)

 

(1,144,913)

Marketing expenses

 

(101,540)

 

(165,650)

Other expenses

 

(33,067)

 

(455,847)

Listing expenses

 

(3,543,087)

 

 

 

Operating (loss) / profit before tax

 

(4,490,836)

 

1,175,834

Income tax expense

 

-

 

160,000

(Loss)/profit for the period

 

(4,490,836)

 

1,335,834

 

 

 

 

 

Other comprehensive income

 

-

 

-

 

 

 

 

 

Total comprehensive (loss)/profit for the period attributable to the equity owners

 

(4,490,836)

 

1,335,834

 

 

 

 

 

(Loss)/earning per share :

 

 

 

 

Basic and diluted (MYR per share)

    6

(15.21 sen)

 

4.52 sen

 

 

 

 

Consolidated Statement of Financial Position

as at 30 June 2016

 

 

Proforma

 

Proforma

 

(Unaudited)

 

(Unaudited)

 

30 June 2016

 

31 December 2015

 

MYR

 

MYR

 

Non-Current Assets

 

 

 

 

Property, plant and equipment                             

 

667,044

 

 

81,102

Intangible assets                                              8

3,021,589

 

2,720,488

 

Total Non-Current Assets

 

3,688,633

 

 

2,801,590

 

Current Assets

 

 

 

 

Trade receivables

 

2,840,139

 

 

1,988,563

Other receivables, deposits and prepayments

124,299

 

78,306

Amount owing by related parties                       10

100,271

 

95,133

Cash and cash equivalents

14,857,325

 

28,616

 

Total Current Assets

 

17,922,034

 

 

2,190,618

Total Assets

21,610,667

 

4,992,208

 

Current Liabilities

 

 

 

 

Trade payables

 

81,020

 

 

6,584

Other payables and accruals

331,777

 

2,358,557

Amount owing to director

3,200

 

6,000

Provision for taxation

-

 

187

Total Current Liabilities

415,997

 

2,371,328

 

Non-Current Liabilities

 

 

 

 

Hire purchase

 

274,000

 

 

-

Total Liabilities

689,997

 

2,371,328

Net Assets

20,920,670

 

2,620,880

 

Equity

 

 

 

Share capital                                                       5

3,152,529

 

1

Share premium

19,638,098

 

-

Merger reserve

4,100,003

 

4,100,003

Retained loss

(5,969,960)

 

(1,479,124)

Total Equity and Reserve

20,920,670

 

2,620,880

                                               

 

 

 

 

Consolidated Statement of Change in Equity

for the period ended 30 June 2016

 

 

 

Share capital

Share premium

Merger reserve

Retained loss

Total

 

 

MYR

MYR

MYR

MYR

MYR

Proforma

 

 

 

 

 

 

Balance at 1 January 2015

 

8,000,003

-

(3,900,000)

(1,532,087)

2,567,916

 

 

 

 

 

 

 

Loss for the period

 

-

-

-

52,963

52,963

Total comprehensive loss for the period

 

-

-

-

52,963

 

52,963

 

Transaction with owners

 

 

 

 

 

 

Issue of share

 

1

-

-

1

Adjustment of group reorganisation

 

(8,000,003)

-

-

 

-

 

 

 

 

 

 

 

Balance at 31 December 2015

 

1

-

4,100,003

(1,479,124)

 

2,620,880

 

 

 

 

 

 

 

Loss for the period

 

-

-

-

(4,490,836)

(4,490,836)

Total comprehensive loss for the period

 

-

-

-

(4,490,836)

 

(4,490,836)

 

Transaction with owners

 

 

 

 

 

 

Issue of share

 

3,152,528

20,951,087

-

24,103,615

Share issuance costs

 

 

(1,312,989)

-

(1,312,989)

 

 

 

 

 

 

 

Balance at 30 June 2016

 

3,152,529

19,638,098

4,100,103

(5,969,960)

20,920,670

 

 

Consolidated Statement of Cash Flows

for the period ended 30 June 2016

 

 

 

Proforma

 

Proforma

 

 

(Unaudited)

 

(Unaudited)

 

 

30 June 2016

(MYR)

 

30 June 2015

(MYR)

 

Cash flow from operating activities

 

 

 

 

 

Operating loss

 

(4,490,836)

 

1,175,834

Amortisation

 

360,387

 

269,313

Depreciation

 

62,518

 

11,842

Impairment losses on trade receivables

 

 

 

174,692

Operating cash flows before movements in working capital

 

(4,067,931)

 

1,631,681

Increase in trade and other receivables

 

(902,707)

 

(2,520,819)

(Decrease) / Increase in trade and other payables

 

(1,955,331)

 

2,208,349

 

 

 

 

 

Net cash used in operating activities

 

 

(6,925,969)

 

1,319,211

 

Cash flows from investing activities

 

 

 

 

Purchase of property, plant & equipment

 

(648,460)

 

(10,378)

Software development expenditure

 

(661,488)

 

(392,400)

Advances to related parties

 

-

 

(313,845)

 

Net cash applied to investing activities

 

(1,309,948)

 

 

(716,623)

 

Cash flows from financing activities

 

 

 

 

Net proceeds from issuance of shares

 

22,790,626

 

-

Repayment hire purchase liabilities

 

274,000

 

-

 

Net cash used in financing activities

 

 

23,064,626

 

 

-

Repayment of a director

 

-

 

(661,744)

Movement in cash and cash equivalents

 

14,828,709

 

(59,156)

Cash and equivalents at beginning of period

 

28,616

 

81,986

Cash and equivalents at end of period

 

14,857,325

 

22,830

 

 

 

Notes to the Consolidated Financial Information

 

1.      General Information

 

DagangHalal Plc (the "Company") was incorporated in Jersey on 10 April 2015 as a public limited company. The registered office of the Company is 43-45 La Motte Street, St Helier, Jersey JE4 8SD.

 

The financial information is for the Company and its subsidiaries undertakings (together, the "Group"). The principal activities of the entities of the Group are as follows:-

 

 

Percentage interest

Country of incorporation

Principal activities

 

 

 

 

DagangHalal plc

-

Jersey

Investment holding

DagangHalal Sdn Bhd

100%

Malaysia

Investment holding

DagangAsia Net Sdn Bhd

 

 

 

 

100%*

 

 

 

 

Malaysia

 

 

 

 

Development and implementation of software, operation of the online marketplace, operation of the HVE, magazine publishing, organising Halal trade shows and carnivals

HVE Innovations Sdn Bhd

100%*

Malaysia

Dormant

DH Events Sdn Bhd

 

100%*

 

Malaysia

 

Holds a publishing permit for HMAG and runs the Dagangasia.com website

 

*indirect interest

 

The consolidated financial information is presented in Malaysian Ringgit (MYR) as this is the currency of the primary economic environment that the Group operates in. The Company was admitted to trading to the ISDX Growth Market on 7 April 2016, following the acquisition of DagangHalal Sdn.Bhd.

 

Although the Group reconstruction did not become unconditional until 31 March 2016, these consolidated financial statements are presented as if the Group structure has always been in place, including the activity from incorporation of the Group's principal subsidiary. Both entities had the same management as well as majority of shareholders. Accordingly, comparative amounts for the six month period ended 30 June 2015 are presented on a proforma basis.

 

2.      Basis of Preparation

 

The interim accounts, which have not been audited, have been prepared in accordance with International Financial Reporting Standards ("IFRS") as adopted for use by the European Union, and effective, or issued and early adopted, as at the date of these statements. The financial statements have been prepared under the historical cost convention as modified for financial assets carried at fair value.

 

These interim consolidated financial statements are for the six month period ended 30 June 2016. They do not include all of the information required for full annual financial statements and should be read in conjunction with the financial information set out in the Company's ISDX Admission Document dated 31 March 2016.

 

These interim financial statements have been prepared in accordance with the accounting policies adopted in the preparation of the financial information set out in the Company's ISDX Admission Document referred above and as disclosed below. These interim financial statements are unaudited but have been reviewed by the Group's auditor.

 

 

 

3.      Significant accounting policies

 

3.1  Accounting judgements, estimates and assumptions

The preparation of financial statements in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of income, expenditure, assets and liabilities. Estimates and judgements are continually evaluated, including expectations of future events to ensure these estimates to be reasonable.

 

The going concern basis of accounting have as been applied as Management are aware of activities since the year end which support the future of the Company (disclosed in events after the period). Management does not consider there to be any other significant judgements and assumptions which would materially affect the financial statements.

 

3.2  Basis of consolidation

The consolidated financial statements include the financial statements of the Company and its subsidiaries made up to the end of the reporting period.

 

Subsidiaries are entities (including structured entities, if any) controlled by the Group. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.  Potential voting rights are considered when assessing control only when such rights are substantive.  The Group also considers it has de facto power over an investee when, despite not having the majority of voting rights, it has the current ability to direct the activities of the investee that significantly affect the investee's return.

 

The acquisition of DagangHalal Sdn Bhd by the Company on 31 March 2016 has been accounted for as a business combination amongst entities under common control. Accordingly, the financial statements of the Group have been consolidated using the merger method of accounting.

 

Under the merger method of accounting, the results of the subsidiaries are presented as if the merger had been effected throughout the current and previous financial years. The assets and liabilities combined are accounted for based on the carrying amounts from the perspective of common control shareholder at the date of transfer. On consolidation, the cost of the merger is cancelled with the values of the shares received. Any resulting debit or credit difference is classified as a non-distributable reserve.

 

The subsidiaries of DagangHalal Sdn Bhd, namely DagangAsia Net Sdn Bhd ("DagangAsia Net"), DH Events Sdn Bhd ("DH Events") and HVE Innovations Sdn. Bhd. ("HVE Innovations") are consolidated using the acquisition method of accounting prior to the internal reorganisation undertaken by the Company. Under the acquisition method of accounting, the results of subsidiaries acquired or disposed of are included from the date of acquisition or up to the date of disposal. At the date of acquisition, the fair values of the subsidiaries' net assets are determined and these values are reflected in the consolidated financial statements. The cost of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given, liabilities incurred or assumed, and equity instruments issued by the DagangHalal Group in exchange for control of the acquiree, plus any costs directly attributable to the business combination.

 

Intra-group transactions, balances, income and expenses are eliminated on consolidation. Intra-group losses may indicate an impairment that requires recognition in the consolidated financial statements.  Where necessary, adjustments are made to the financial statements of subsidiaries to ensure consistency of accounting policies with those of the Group.

 

 

 

 

 

 

4.      Income tax expenses

 

The Company is regarded as resident for the tax purposes in Jersey and it is subject to Jersey income tax at the general rate of zero percent.

 

Tax expense is recognised based on management's best estimate of the weighted average annual tax rate expected for the full financial year applied to the pre-tax income of the interim period. The Group's consolidated effective tax rate in respect of continuing operations for the six months ended 30 June 2015 was lower that the Malaysian statutory tax rate of 25% (six months ended 30 June 2014: 25%) caused mainly by the following factors:-

 

·     A subsidiary, DagangAsia Net Sdn Bhd was granted Multimedia Super Corridor ("MSC") status by the Malaysian Government, which qualifies the subsidiary for the Pioneer Status incentive under the Promotion of Investments Act 1986. DagangAsia Net will enjoy full exemption from income tax on its statutory income from pioneer activities for a period of 10 years, from 2 July 2009 to 1 July 2019.

 

5.      Share capital and share premium

 

 

Number of shares

Share

capital

Share

premium

 

 

(MYR)

(MYR)

 

 

 

 

On incorporation 

2

1

-

Issue of share - 31 March 2016

57,288,442

3,087,848

19,398,767

Issue of share - 7 April 2016

1,200,000

64,680

1,552,320

Less: transaction costs

-

-

(1,312,989)

Total

58,488,442

3,152,529

19,638,098

 

On 31 March 2016, the Company issued 57,288,442 ordinary shares to certain holders of the share capital of DagangHalal Sdn Bhd pursuant to the share exchange agreement, in consideration for the transfer of the entire share capital of DagangHalal Sdn Bhd to the Company.

 

On 7 April 2016, the Company's shares had been admitted to trading on ISDX Growth Market. The Company has further issued 1,200,000 ordinary shares of par value of £0.01 each at £0.25 per share from the public placement for a total consideration of £300,000 before issue costs.

 

As at 30 June 2016, the total issued ordinary shares of the Company was 58,488,442 ordinary share of £0.01 each.

 

 

6.      (Loss)/earning per Share

 

The calculation of the consolidated loss per share is based on the following loss and number of shares:

 

 

 

 

 

 

 

Period  ended

 

Period  ended

 

 

Proforma

30 June 2016

(MYR)

 

30 June 2015

(MYR)

Loss/profit for the period

(4,490,836)

 

1,335,834

 

 

 

 

Weighted average shares in issue:

29,519,434

 

29,519,434

 

 

 

 

Basic & diluted (proforma)

(15.21 sen)

 

4.52 sen

 

Basic loss per share is based on the weighted average number of ordinary shares in issue during the period. Diluted loss per share would assume conversion of all potentially dilutive ordinary shares. DagangHalal has no potentially dilutive ordinary shares. The interim consolidated financial information represents the historical information prior to a group reorganisation on 31 March 2016 whereby the Company became the parent company of the enlarged group. It is of limited significance to calculate earnings per share on the historical equity of the companies forming the DagangHalal Group prior to the reorganisation.  Accordingly, a pro forma loss per share has been included based on the number of shares in the Company in issue on admission to ISDX. 

 

7.      Property, plant and equipment

 

During the period, the Group incurred MYR 648,460 additions to property, plant and equipment, mainly in acquiring office equipment (1H 2015: MYR 10,378; Dec 2015: MYR 14,178). The depreciation charge for the period on the Group's property, plant and equipment was MYR 62,518.

 

8.      Intangible assets

 

The intangible assets comprise of development costs and intellectual property. Development costs principally comprise internally generated expenditure cost on major portal development projects where it is reasonably anticipated that the costs will be recovered through future commercial activity.

 

 

 

30 June 2016

31 Dec 2015

 

(MYR)

(MYR)

 

 

 

Development cost

552,769

487,385

Intellectual property

2,468,820

2,233,103

 

 

3,021,589

 

2,720,488

 

 

9.      Merger deficit

 

The accounting treatment for Group reorganisation is scoped out of IFRS 3. Accordingly, as required under IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors, the Group has referred to current UK GAAP (FRS 102) to assist its judgement in identifying a suitable accounting policy. The introduction of the new holding company has been accounted for as a capital reorganisation using the merger accounting principles prescribed under current UK GAAP. Therefore the consolidated financial statements of DagangHalal PLC is presented as if DagangHalal PLC has always been the holding company for the Group.

 

The use of merger accounting principles has resulted in a balance on Group capital and reserves that have been classified as a merger reserve and included in the Group's shareholders' funds. The consolidated financial statements include the results of the Company and all its subsidiary undertakings made up to the same accounting date.

 

 

 

 

 

 

10.    Related party transactions

 

Other than those disclosed elsewhere in financial statements, the Group carried out the following transaction with related parties during the financial period. The summary of the amount owing by the related party is:

 

 

 

 

 

 

 

Period  ended

Period  ended

Country of Incorporation

30 June 2016

(MYR)

 

31 Dec 2015

(MYR)

 

 

WEBSE Sdn Bhd

 

Malaysia

 

100,271

 

95,133

 

 

WEBSE Sdn Bhd have common director. Key management personnel, which for DagangHalal plc is the company's directors, received no remuneration in the period.

 

 

11.    Copies of the Interim Report

 

Copies of the interim report will be available on the Company's website at www.daganghalalgroup.com and from the Company's registered office.

 

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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