TIDMRCI
RNS Number : 0814L
RapidCloud International PLC
28 September 2016
RapidCloud International Plc
("RapidCloud", the "Company" or the "Group")
Half Yearly Report
RapidCloud International plc (AIM:RCI), the computing services,
web-hosting and web-solutions provider based in Southeast Asia,
announces its results for the six months ended 30 June 2016.
Financial highlights
-- Revenue of RM 7.5m (H1 2015: RM 7.8m)
o Recurring revenue now 52% of total revenues (H1 2015: 43%)
-- Gross Profit increased 7% to RM4.8m (H1 2015: RM4.4m)
o Gross profit margin of 64% (H1 2015: 57%)
-- Operating Profit flat at RM0.6m (H1 2015: RM 0.6m)
-- Net cash as of 30 June 2016 of RM3.3m (31 Dec 2015: RM 6.8m)
o Net trade receivables RM13.5m (31 Dec 2015: RM13.8m)
Operational highlights
-- Launched SalesMAP, a Sales Management, Automation & Productivity tool for businesses
-- Launched Ximplify, an enterprise grade messaging and collaboration system
-- Appointment of Symphonet Malaysia and Interlink Thailand as strategic partners
-- E-commerce contract win for Wellmart Online Sdn Bhd, a subsidiary of Delloyd Ventures Group
-- Strategic Partnership with AliCloud for South East Asia
Post period-end highlights
-- Appointment as a channel sales partner for Alibaba.com across Malaysia
-- API Gateway contract win for Sime Darby Global Services
Centre Sdn Bhd, a subsidiary of Sime Darby Group
Raymond Chee, Chief Executive of RapidCloud, said: "The
financial results for the six-month period reflected the downturn
in our end markets witnessed at the end of 2015. Furthermore, we no
longer expect sequential revenue growth in the second half of the
current year and now believe the full year results for the 12
months to December 2016 will be similar to last year, which is
below current market expectations.
"Notwithstanding the difficult trading environment, I am pleased
with the operational progress the Company has made during the six
months to 30 June 2016. During the period, the Company has
developed new products, launched several high value enterprise
grade software packages and signed significant strategic agreements
with distributors and Alibaba, one of the world's largest
e-commerce organisations.
"As a result of the operational progress, I believe the Company
is now in a much stronger position that it has historically and
whilst I do not expect sales at accelerate during the remainder of
the current year, I remain confident that the Company is well
placed to benefit from any upturn in its end markets in 2017 and
beyond"
Enquiries
RapidCloud International investorqueries@rapidcloudasia.com
Plc
Raymond Chee, Managing
Director
David Cotterell, Chairman
WH Ireland, Nominated Adviser Tel:+44 (0)20 7220 1666
and Broker
Adrian Hadden
James Bavister
Walbrook, Financial PR Tel: 44 (0)20 7933 8780
and IR rapidcloud@walbrookpr.com
Paul Cornelius
Sam Allen
About RapidCloud
RapidCloud, provides computing services, web-hosting and
proprietary web-solutions, such as web-site building and e-commerce
solutions. The Company is based in Southeast Asia and is one of the
few solutions providers in the region to deliver its offerings
through all three available Cloud Computing segments, i.e.
Software-as-a-Service, Infrastructure-as-a-Service and
Platform-as-a-Service.
Formed in 1999 the Company has a well-established cloud offering
with a customer base of over 43,000. These are predominantly SMEs
but also include blue-chip clients such as Deloitte, BAE Systems
and Canon, for which RapidCloud's extensive R&D department
creates bespoke software solutions.
RapidCloud currently has operations in Malaysia, Indonesia,
Singapore, Thailand and the Philippines. According to industry
research commissioned by RapidCloud from Frost & Sullivan in
2013, the Cloud Computing industry in Asia Pacific is expected to
grow at a CAGR of 49.6% between 2013 and 2015, giving a market size
of US45.6 billion by 2015. RapidCloud International plc was
admitted to AIM on 14 August 2013. For further information, please
visit www.rapidcloudasia.com
CHAIRMAN'S REVIEW
Our strategy in the first half of 2016 was to continue investing
in the Company's products and services to expand the scale and
geographic coverage of the business. To achieve this rapidly and
with minimum expense, the Company chose to engage with channel
partners such as Alibaba and Celcom to achieve that goal during the
year to date.
Although market conditions continue to be difficult, we have
maintained our footprint and customer base, in addition to
continuing to developing our core product suite including Sales
Automation Tools, enterprise email, corporate site-builders and
enterprise e-commerce systems, which can be customised by our
extensive SME customer base.
Since IPO, having completed a three-year term as chairman I have
decided that with the publishing of these results, now is right
time for a new Chairman to take the Company onto its next phase.
Conversations are underway to identify my replacement and in the
meantime Mr. Brian Wong, Audit Committee Chairman will become
Interim non-executive Chairman. As a partner with PKF Malaysia as
well as a non-executive director of two other publicly quoted
companies, I am sure he will provide a seamless transition to the
full-time Chairman.
I would like to thank all of our employees and shareholders for
their continued support and contribution during the period under
review and I wish the company every success in the second half of
2016 and in the coming years.
CHEIF EXECUTIVE'S REVIEW
Financial Performance
Revenue for the six-month period to 30 June 2016 was RM7,512k,
which generated a gross profit of RM4,772k. The improvement of
gross margin, from 57% to 64%, was a direct result of an improved
sales mix and higher price points of some of the new software
products being offered by the Company.
Other operating income increased to RM192k from RM97k.
Administrative expenses increased 11% to RM4,354k from RM3,936k
as the Company invested in product development and sales support to
increase coverage in terms of capabilities and geographical
reach.
Operating profit and profit before tax therefore remained
largely flat year on year at RM610k and RM598k respectively. Income
tax increased to RM70k from RM21k as the company moved to a more
normal tax environment post IPO.
However, profit attributable to ordinary shareholders, decreased
to RM602k from RM767k which decreased basic and diluted earnings
per share to 2.72sen (1H15: 4.11) and 2.64 (1H15: 3.97)
respectively as the weighted average number of shares increased
from 18,656,752 to 22,149,086 as a result of the equity placing in
the previous year.
Cash outflow from operations for the half year in 2016 was
RM1,569k, versus a cash inflow for the respective period in 2015 of
RM904k, primarily due to the increase in receivables and payables
as trading activity increased towards the period end.
Purchase of property, plant and equipment remained steady at
RM1,070k (1H15: RM847k) as the company invested in infrastructure
to service larger clients secured post the balance sheet date and
software expenditure fell marginally to RM409k (1H15: RM510k) as
certain software development programmes came to a close.
Cash and cash equivalents as of 30 June 2016 was RM3,325k, down
from RM6,794k as of 31 December 2015.
Operational Review
During the six-month period to 30 June 2016, the Company
launched a Disaster Recovery as a Service ("DRaaS") solution,
appointed distributors in Thailand & Malaysia in addition to
announcing a contract win worth approximately RM550,000 and,
perhaps most importantly, signed a major strategic partnership with
AliCloud for South East Asia.
DRaaS Service
DRaaS is a cloud delivered disaster recovery managed service for
protecting companies from loss of mission critical data in the
event of a man-made or natural disaster. It is designed to ensure
business continuity by minimising downtime and disruption in the
event of server failure or other disaster.
Strategic Distribution Partnerships
RapidCloud has also successfully signed two strategic
partnerships with Symphonet Sdn Bhd ("Symphonet") in Malaysia and
Interlink Communication PCL ("Interlink") in Thailand to market its
new disaster recovery as a service managed services.
Symphonet is a Malaysian fibre optic network operator offering
dedicated high speed data Internet connections, wireless, Ethernet,
leased lines, IP CCTV solutions, network services and network
security services to over 1,000 businesses, large corporations and
commercial buildings in Malaysia.
Interlink is one of the largest fibre optic backbone providers
in Thailand. It is publicly traded on the mainboard of the Stock
Exchange of Thailand (SET). Interlink is engaged in implementation
of high speed structured telecommunication networks and
distribution of networking solutions. Riding on the advanced
fibre-optic technology, enterprise customers and service providers
are able to benefit from Interlink's leading-edge fibre optical
network nationwide.
Both strategic partnerships allow Symphonet and Interlink to
offer its customers a selection of RapidCloud's enterprise
applications, beginning with DRaaS packaged together with their
fibre connectivity, to provide a seamless and reliable high-speed
transfer of critical data between the customer's primary server and
RapidCloud's DRaaS facility.
Contract Win Worth RM550,000
During the period, the Company announced a contract win with
Wellmart Online Sdn Bhd ("Wellmart"), a subsidiary of the
automotive & plantation conglomerate Delloyd Ventures Group,
for the Company's e-commerce portal system development tools and
consulting services. The contract is expected to generate revenue
of approximately RM550,000 in its first year of operation.
Wellmart is a multichannel e-commerce marketplace providing
one-stop online shopping solution for specialised automotive parts
targeting the Association of Southeast Asian Nations ("ASEAN")
market. The solution will be built on the RapidCloud PortalWEB
platform, supported by its responsive web and mobile app (iOS &
Android) user interface, to provide customers with an effortless
shopping experience and retailers with simple and direct access. By
leveraging the RapidCloud partner eco-system, Wellmart is able to
integrate this platform with its logistics partner to automate the
operational processes.
RapidCloud will also be providing its comprehensive ecommerce
consulting services to Wellmart from Infrastructure to platform, to
user experience and go-to-market strategies leveraging on its
digital and social media marketing capability.
Major Strategic Partnership with AliCloud for South East
Asia
In March 2016, the Company announced its wholly owned
subsidiary, RapidCloud (M) Sdn. Bhd., had signed a strategic
partnership and distributorship with Alibaba.com Singapore
E-commerce Private Limited ("AliCloud"), the international business
and cloud computing arm of the Alibaba Group (NYSE:BABA).
Alibaba Cloud Computing, otherwise known as AliCloud, is one of
the world's largest e-commerce companies, and was established in
2009 to operate the network that powers Alibaba's extensive online
and mobile commerce ecosystem with a comprehensive suite of cloud
computing services globally. AliCloud develops highly scalable
cloud computing and data management services for over 1,800,000
customers worldwide, providing both large and small international
businesses, financial institutions, governments and other
organizations with flexible, cost-effective solutions for
networking and IT needs.
The partnership will allow RapidCloud to offer AliCloud's public
cloud infrastructure, consulting, managed services, training and
support across its offices in South East Asia. RapidCloud will also
be making its key products available from AliCloud platform as a
total service offering to its customers. After six months of
research and development, RapidCloud's key products such as its
enterprise content management system, sales automation tool and
document management have already been developed to be tightly
integrated onto AliCloud platform. This will allow Alibaba and
AliCloud users to be able to subscribe to such services easily.
The benefits of having RapidCloud's products on AliCloud
platform include better reliability, faster access from various
locations, including China and better scalability. At the same
time, RapidCloud will also be working together with AliCloud and
its parent company Alibaba to implement various go to market
strategies and cross-selling opportunities.
Post Period End
In July 2016, the Company was selected by Sime Darby Global
Services Centre Sdn. Bhd. ("Sime Darby"), a subsidiary of Malaysian
conglomerate Sime Darby Group, for the integration between the IFCA
Enterprise Resource Planning ("ERP") System and ReadSoft Process
Director Business Automation tool worth approximately
RM200,000.
The project, which involves the deployment of an integrated API
Gateway Middleware developed by the Company, will allow Sime Darby
Global Services Centre to deliver cost efficiencies and embedded
controls that, in turn, enhance the service effectiveness by
reducing the complexity of its system management and increasing
agility with improving access to information.
RapidAPI gateway achieves this by streamlining the management
and operation of applications whilst, at the same time, enhancing
security and regulatory compliance. The solution is ideal for
organisations that are exposed to management and security
challenges, such as Governments, Telcos, Internet Service Providers
and large-scale enterprises, given the existence of the large and
diverse number of applications running within their network.
In August 2016, the Company was appointed by Alibaba.com, a
global B2B platform of Alibaba Group, as an authorised Gold
Supplier membership channel sales partner for Malaysia.
This appointment will enable RapidCloud to help Alibaba.com
enroll Malaysian SMEs into its Gold Supplier membership, offering
Alibaba.com's Malaysian Gold Supplier members, typically exporters,
traders, retailers and manufacturers, certain value-added services
via the international business-to-business platform operated by
Alibaba.com. In addition, RapidCloud will be able to up-sell its
existing software suite including digital marketing, e-commerce and
sales automation tools, e-mail and cloud services as well as
provide local support and training services to both existing and
prospective Alibaba.com Malaysian Gold Supplier members.
This agreement, which is complementary to the partnership with
Alibaba Cloud (the cloud computing arm of Alibaba Group) announced
on 8 March 2016, positions RapidCloud well to sell both Alibaba
tools and services and its own proprietary software to Alibaba.com
Gold Supplier members to enable them to rapidly expand the volume
of transactions they complete, thereby adding significant value to
those enterprises.
RapidCloud will initially deploy at least 30 of its existing
sales people to capture this market opportunity over the first six
months of the agreement, which will expand to at least 40 sales
people within the first year of the agreement.
I would like to take this opportunity to thank, David,
non-executive Chairman, for his guidance, support and expertise for
the past three years since IPO and wish him well for the future.
The Company now begins its search for a new Chairman to take the
Company onto its next phase. Conversations are underway to identify
David's replacement. In the meantime, I welcome Mr. Brian Wong,
Audit Committee Chairman, who will become Interim non-executive
Chairman.
Outlook
We expect the challenging trading environment experienced in the
first half to continue through the remainder of the current
financial year. We therefore expect the financial results for the
12 months to December 2016 will now be similar to last year, which
is below current market expectations.
However, the Company will continue to invest in its own
corporate development to expand the number of products, services
and territories it currently targets.
Furthermore, with strategic distributors and partners now in
place, the business is now on a much sounder footing than ever
before and is well placed to benefit from any upturn in its end
markets.
Consolidated Interim Statement of Comprehensive Income
for the six months ended 30 June 2016
Notes (Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
to to
30 June 30 June 31 December
2016 2015 2015
(RM'000) (RM'000) (RM'000)
------------------------------- ----------- ----------------------------------
Continuing operations
Revenue 2 7,512 7,838 17,153
Cost of sales (2,740) (3,396) (7,307)
------------------------------- ----------- ----------------------------------
Gross profit 4,772 4,442 9,846
Other operating income 192 97 980
Administrative expenses (4,354) (3,936) (10,243)
Operating profit 610 603 583
Finance costs (12) (8) (31)
------------------------------- ----------- ----------------------------------
Profit before tax 598 595 552
Income tax expense (70) (21) (53)
------------------------------- ----------- ----------------------------------
Profit for the year 528 574 499
------------------------------- ----------- ----------------------------------
Other comprehensive
income
Exchange differences
on translation of
foreign operations 109 (41) 85
------------------------------- ----------- ----------------------------------
Total comprehensive
income 637 533 584
------------------------------- ----------- ----------------------------------
Profit attributable
to:
Equity owners of
the parent company 602 767 856
Non-controlling interests (74) (193) (357)
------------------------------- ----------- ----------------------------------
528 574 499
------------------------------- ----------- ----------------------------------
Total comprehensive
income attributable
to:
Equity owners of
the parent company 601 771 1,042
Non-controlling interests 36 (238) (458)
------------------------------- ----------- ----------------------------------
637 533 584
------------------------------- ----------- ----------------------------------
Earnings per share
Basic (Sen) 3 2.72 4.11 4.20
Diluted (Sen) 3 2.64 3.97 4.07
------------------------------- ----------- ----------------------------------
Consolidated Interim Statement of Financial Position
as at 30 June 2016
Notes (Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
to to
30 June 30 June 31 December
2016 2015 2015
(RM'000) (RM'000) (RM'000)
----------- -------------- ------------
ASSETS
Non-current assets
Property, plant and
equipment 4 8,183 6,032 7,708
Software development
assets 5 3,431 2,622 3,160
Intangible assets
and goodwill 5,839 5,839 5,839
----------- -------------- ------------
17,453 14,493 16,707
----------- -------------- ------------
Current assets
Trade and other receivables 6 17,579 11,623 16,581
Cash and cash equivalents 3,325 13,604 6,794
Taxation recoverable 189 111 -
----------- -------------- ------------
21,093 25,338 23,375
----------- -------------- ------------
Total assets 38,546 39,831 40,082
----------- -------------- ------------
LIABILITIES
Current liabilities
Trade and other payables 1,147 2,463 3,266
Hire purchase liabilities 39 222 92
Taxation payable 2 - 2
----------- -------------- ------------
1,188 2,685 3,360
----------- -------------- ------------
Non-current liabilities
Hire purchase liabilities 744 457 744
Deferred tax liability 98 86 98
----------- -------------- ------------
842 543 842
----------- -------------- ------------
Total liabilities 2,030 3,228 4,202
----------- -------------- ------------
Net assets 36,516 36,603 35,880
----------- -------------- ------------
EQUITY
Capital and reserves
attributable to equity
holders
Share capital 7 35,105 34,942 35,105
Shares to be issued 2,074 2,074 2,074
Merger reserve (13,260) (13,260) (13,260)
Currency translation
reserve 123 (58) 124
Retained earnings 13,576 13,823 12,975
----------- -------------- ------------
37,618 37,521 37,018
Non-controlling interest (1,102) (918) (1,138)
----------- -------------- ------------
36,516 36,603 35,880
----------- -------------- ------------
Consolidated Interim Statement of Cash Flow
six months ended 30 June 2016
Notes (Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
to to
30 June 30 June 31 December
2016 2015 2015
(RM'000) (RM'000) (RM'000)
----------- ----------- ------------
Cash flows from operating
activities
Profit before tax 598 595 552
Adjustments for non-cash
items
Depreciation 4 544 282 1,434
Amortisation of software
development assets 5 137 379 804
Deposit written off - - 2
Gain on disposal
of equipment - - (55)
Impairment of trade
receivables 6 - - 252
Reversal of impairment
on trade receivables - - (15)
Foreign exchange
loss/(gain) (59) (6) -
Finance income (1) (1) (5)
Finance costs 12 8 31
----------- ----------- ------------
Operating profit
before working capital
changes 1,231 1,257 3,000
Increase in trade
and other receivables (1,236) (423) (5,283)
Decrease in trade
and other payables (1,564) 70 232
----------- ----------- ------------
Cash generated from
operations (1,569) 904 (2,051)
Interest paid (12) (8) (31)
Interest received 1 1 5
Tax refund - - 75
Tax paid (97) (62) (208)
----------- ----------- ------------
Net cash from operating
activities (1,677) 835 (2,210)
----------- ----------- ------------
Cash flow from investing
activities
Purchase of property,
plant and equipment (1,070) (847) (3,362)
Proceeds from sales
of property, plant
and equipment 2 - 156
Software development
expenditure 5 (409) (510) (1,473)
Net cash used in
investing activities (1,477) (1,357) (4,679)
----------- ----------- ------------
Consolidated Interim Statement of Cash Flow (continued)
six months ended 30 June 2016
Notes (Unaudited) (Unaudited) (Audited)
Six months Six months Year ended
to to
30 June 30 June 31 December
2016 2015 2015
(RM'000) (RM'000) (RM'000)
----------- ----------- ------------
Cash flows from financing
activities
Dividends paid - - (207)
Repayment of hire
purchase liabilities (249) (90) (229)
Proceeds on issue
of placing shares 7 - 10,333 9,766
----------- ----------- ------------
Net cash from financing
activities (249) 10,243 9,330
----------- ----------- ------------
Net (decrease)/increase
in cash and cash
equivalent (3,403) 9,721 2,441
----------- ----------- ------------
Effect on exchange
rate changes on cash
and cash equivalent (66) (48) 422
----------- ----------- ------------
Cash and cash equivalents
at the beginning
of the period 6,794 3,931 3,931
----------- ----------- ------------
Cash and cash equivalents
at the end of the
period 3,325 13,604 6,794
----------- ----------- ------------
Consolidated Interim Statement of Changes in Equity
six months ended 30 June 2016
Share Share Merger Foreign Retained Total Non-controlling Total
capital to be reserve Currency earnings RM'000 interests equity
RM'000 issued RM'000 Translation RM'000 RM'000 RM'000
RM'000 Reserve
RM,000
-------- ------- -------- ----------- ----------------- -------- --------------------- --------
Balance on 1
January 2015 24,609 2,074 (13,260) (62) 13,056 26,417 (680) 25,737
Transaction
with owners,
recorded
directly in
equity
Issue of
placing
shares 10,333 - - - - 10,333 - 10,333
Total
comprehensive
income
Profit for the
period - - - - 767 767 (193) 574
Others
comprehensive
income - - - 4 - 4 (45) (41)
Balance at 30
June 2015 34,942 2,074 (13,260) (58) 13,823 37,521 (918) 36,603
-------- ------- -------- ----------- ----------------- -------- --------------------- --------
Transaction
with owners,
recorded
directly in
equity
Issue of
placing
shares 10,334 - - - - 10,334 - 10,334
Share issue
costs (568) - - - - (568) - (568)
Dividends paid 730 - - - (937) (207) - (207)
-------- ------- -------- ----------- ----------------- -------- --------------------- --------
Total
comprehensive
income
Profit for the
year - - - - 856 856 (357) 499
Others
comprehensive
income - - - 186 - 186 (101) 85
Balance at 31
December
2015 35,105 2,074 (13,260) 124 12,975 37,018 (1,138) 35,880
-------- ------- -------- ----------- ----------------- -------- --------------------- --------
Total
comprehensive
income
Profit for the
period - - - - 601 601 (74) 527
Others
comprehensive
income - - - (1) - (1) 110 109
Balance at 30
June 2016 35,105 2,074 (13,260) 123 13,576 37,618 (1,102) 36,516
-------- ------- -------- ----------- ----------------- -------- --------------------- --------
Notes to the Financial Information
six months ended 30 June 2016
1. Accounting policies
This consolidated interim financial information, which is
unaudited for the half-year ended 30 June 2016, has been prepared
on a consistent basis in accordance with the International
Financial Reporting Standards ('IFRS') as adopted by the European
Union ('EU') issued by the International Accounting Standards Board
('IASB').
They do not contain all of the information required for the full
financial statements and should be read in conjunction with the
consolidated financial statements of the Group as at and for the
year ended 31 December 2015. These interim financial statements do
not constitute statutory accounts within the meaning of the
Companies Act.
This consolidated interim financial information has been
prepared in accordance with AIM Rules for Companies and IAS 34
'Interim Financial Reporting' and is presented in Malaysia Ringgit
('RM') which is the currency of the primary economic environment in
which the Group operates. The functional currency for each
individual entity is the local currency of that individual entity.
All amounts are prepared to the nearest thousand (RM'000) except
where otherwise indicated.
RapidCloud International plc ('RCI' or the 'Company') is a
company registered and incorporated in Jersey on 15 March 2013. The
address of the registered office is 13-14 Esplanade, St. Helier,
Jersey, JE1 1BD.
2. Operating segments
An operating segment is a component of the Group that engages in
business activities from which it may earn revenues and incur
expenses. IFRS 8 'Operating Segments' requires disclosure of the
operating segments that are reported to the Chief Operating
Decision Maker ('CODM'). The CODM at the end of the financial
period under review is the Board of Directors, who have
responsibility for planning and controlling the activities of the
Group. The Group's reportable segment has been identified as the
provision of Cloud Computing services. Across the Group there is
considered to be a commonality in the nature of services, the type
of customer, the methods used to provide services and the
regulatory environment.
All operations of the Group are carried out in South East Asia.
All revenues therefore arise within South East Asia. No single
external customer amounts to 10 per cent or more of the Group's
revenues.
As the Group only has one reportable segment, no further
segmental information is disclosed.
3. Earnings per share
The calculation of the basic and diluted earnings per share is
based on the following:
Six months Six months Year ended
to 30 June to 30 June 31 December
2016 RM'000 2015 2015
RM'000 RM'000
------------ ----------- ------------
Profit for the financial
period and basic earnings
attributed to ordinary
shareholders 602 767 856
------------ ----------- ------------
Number Number Number
------------ ----------- ------------
Weighted average numbers
of ordinary shares 22,149,086 18,656,752 20,401,402
Sen Sen Sen
---- -------------------------- ----
Earnings per share:
Basic 2.72 4.11 4.20
Diluted 2.64 3.97 4.07
---- -------------------------- ----
If the basic earnings per share is diluted by the 650,000
deferred contingent shares to be issued as part of the acquisition
of RapidCloud Singapore Pte. Ltd., the dilutive earnings per share
would be 2.64 Sen (31 December 2015: 4.07 Sen; 30 June 2015: 3.97
Sen).
Notes to the Financial Information (continued)
six months ended 30 June 2016
4. Property, plant and equipment
Fixtures, Office Computers Motor Renovation Signboard Sun Total
fittings equipment & software vehicles RM'000 RM'000 Microsystems RM'000
& RM'000 RM'000 RM'000 equipment
equipment RM'000
RM'000
--------- -------------------------- --------------------- -------------------------- ------------------------------- ---------- ------------ -------
Period
ended 30
June 2016
Cost
At 1
January
2016 1,022 791 5,794 1,009 2,580 32 465 11,693
Additions 107 40 924 - - - - 1,071
Disposals - - (2) - - - - (2)
Exchange
difference (3) (7) (2) - (51) - - (63)
--------- -------------------------- --------------------- -------------------------- ------------------------------- ---------- ------------ -------
At 30 June
2016 1,126 824 6,714 1,009 2,529 32 465 12,699
--------- -------------------------- --------------------- -------------------------- ------------------------------- ---------- ------------ -------
Charge for
the
year
At 1
January
2016 260 226 2,272 228 506 28 465 3,985
Charge for
the
year 35 33 374 50 52 - - 544
Disposals - - (1) - - - - (1)
Exchange
difference (2) (8) 6 - (8) - - (12)
--------- -------------------------- --------------------- -------------------------- ------------------------------- ---------- ------------ -------
At 30 June
2016 293 251 2,651 278 550 28 465 4,516
--------- -------------------------- --------------------- -------------------------- ------------------------------- ---------- ------------ -------
Net book
value
At 30 June
2016 833 573 4,063 731 1,979 4 - 8,183
--------- -------------------------- --------------------- -------------------------- ------------------------------- ---------- ------------ -------
Included within property, plant and equipment are motor vehicles
acquired under hire purchase agreements with carrying values of
RM731,000 (2015: 781,000)
4. Property, plant and equipment (continued)
Fixtures, Office Computers Motor Renovation Signboard Sun Total
fittings equipment & software vehicles RM'000 RM'000 Microsystems RM'000
& equipment RM'000 RM'000 RM'000 equipment
RM'000 RM'000
------------ ----------- ------------ ---------- ----------- ---------- -------------- --------
Period ended
30
June 2015
Cost
At 1 January
2015 1,003 740 2,516 657 2,463 32 465 7,876
Additions 149 22 658 218 - - - 1,047
Disposals - - - - - - - -
Exchange
difference 5 8 5 - 48 - - 66
------------ ----------- ------------ ---------- ----------- ---------- -------------- --------
At 30 June
2015 1,157 770 3,179 875 2,511 32 465 8,989
------------ ----------- ------------ ---------- ----------- ---------- -------------- --------
Depreciation
At 1 January
2015 134 104 1,465 196 272 25 465 2,661
Depreciation
charge 33 34 102 40 72 1 - 282
Disposals - - - - - - - -
Exchange
difference 3 3 3 - 5 - - 14
------------ ----------- ------------ ---------- ----------- ---------- -------------- --------
At 30 June
2015 170 141 1,570 236 349 26 465 2,957
------------ ----------- ------------ ---------- ----------- ---------- -------------- --------
Net book value
At 30 June
2015 987 629 1,609 639 2,162 6 - 6,032
------------ ----------- ------------ ---------- ----------- ---------- -------------- --------
Included within property, plant and equipment are motor vehicles
acquired under hire purchase agreements with carrying values of
RM639,000 (2014: 461,000)
4. Property, plant and equipment (continued)
Fixtures, Office Computers Motor Renovation Signboard Sun Total
fittings equipment & vehicles RM'000 RM'000 Microsystems RM'000
& equipment RM'000 software RM'000 equipment
RM'000 RM'000 RM'000
------------ ----------- ---------- ---------- ----------- ---------- --------------- --------
Year ended 31
December
2015
Cost
At 1 January
2015 1,003 740 2,516 657 2,463 32 465 7,876
Additions 10 33 3,269 596 - - - 3,908
Disposals - - - (244) - - - (244)
Exchange
difference 9 18 9 - 117 - - 153
------------ ----------- ---------- ---------- ----------- ---------- --------------- --------
At 31 December
2015 1,022 791 5,794 1,009 2,580 32 465 11,693
------------ ----------- ---------- ---------- ----------- ---------- --------------- --------
Charge for the
year
At 1 January
2015 134 104 1,465 196 272 25 465 2,661
Charge for the
year 121 115 801 175 219 3 - 1,434
Disposals - - - (143) - - - (143)
Exchange
difference 5 7 6 - 15 - - 33
------------ ----------- ---------- ---------- ----------- ---------- --------------- --------
At 31 December
2015 260 226 2,272 228 506 28 465 3,985
------------ ----------- ---------- ---------- ----------- ---------- --------------- --------
Net book value
At 31 December
2015 762 565 3,522 781 2,074 4 - 7,708
------------ ----------- ---------- ---------- ----------- ---------- --------------- --------
Included within property, plant and equipment are motor vehicles
acquired under hire purchase agreements with carrying values of
RM781,000 (2014: 461,000)
5. Software development expenditure
Six months Six months Year ended
to to 31 December
30 June 30 June 2015
2016 2015 RM'000
RM'000 RM'000
---------- ---------- ------------
Cost
At the beginning of
the period 6,772 5,299 5,299
Additions 408 510 1,473
---------- ---------- ------------
At the end of the period 7,180 5,809 6,772
---------- ---------- ------------
Accumulated amortisation
At the beginning of
the period 3,612 2,808 2,808
Charge for the financial
period 137 379 804
---------- ---------- ------------
At the end of the period 3,749 3,187 3,612
---------- ---------- ------------
Carrying amount
At the end of the period 3,431 2,622 3,160
---------- ---------- ------------
Software development assets comprise capitalised development
work on software products. These costs are internally generated
wages and salaries costs arising from the Group's software
development and are recognised only if all the following conditions
are met:
-- an asset is created that can be identified;
-- it is possible that the asset created will generate future economic benefit; and
-- the development cost of the asset can be measured reliably.
Once development has been completed the software development
intangible assets are amortised on a straight-line basis over their
useful lives, which is assessed annually and is currently
considered to be 5 years.
The Group assesses at each reporting date whether there is an
indication that an asset may be impaired. If any such indication
exists, or when annual impairment testing for an asset is required,
the Group makes an estimate of the asset's recoverable amount. An
asset's recoverable amount is the higher of an asset's or
cash-generating unit's fair value less costs to sell and its value
in use and is determined for an individual asset, unless the asset
does not generate cash inflows that are largely independent of
those from other assets or groups of assets. Where the carrying
amount of an asset exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable
amount.
There have been no impairments in the period under review.
6. Trade and other receivables
30 June 30 June 31 December
2016 2015 2015
RM'000 RM'000 RM'000
------- ------- -----------
Trade receivables 14,337 10,504 14,617
Less: impairment provision (834) (592) (853)
Add: reversal of impairment
provision - - 15
------- ------- -----------
Net trade receivables 13,503 9,912 13,779
Other receivables 1,833 587 714
Prepayments 2,243 1,124 2,088
------- ------- -----------
17,579 11,623 16,581
------- ------- -----------
The Group's normal trade credit terms range from 30 to 60 days,
however, the Group's Government and Multinational customers enjoy
credit terms of 90 to 120 days. Other credit terms are assessed and
approved on a case-by-case basis. The Group has no significant
concentration of credit risk that may arise from exposure to a
single receivable. The Directors consider that the carrying amount
of trade and other receivables approximates to their fair values.
All of the Group's trade receivables have been reviewed for
indicators of impairment. There was no impairment of trade
receivables for the six months to 30 June 2016 (31 December 2015:
RM252,000; 30 June 2015: RM Nil).
Trade receivables above include amount that are past due at the
period-end but against which no allowance for doubtful receivables
has been made because there has not been any significant change in
credit quality and the amounts are still considered
recoverable.
7. Share Capital
Authorised at 30 June 2016
An unlimited number of ordinary shares of no par value each
Number
-----------
At 1 January 2016 22,149,086
New shares issued -
-----------
At 30 June 2016 22,149,086
-----------
8. Subsequent events
There were no material events that occurred subsequent to the
end of the reporting date to the date of approval of these
financial statement
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR AKFDNKBKDDCB
(END) Dow Jones Newswires
September 28, 2016 07:00 ET (11:00 GMT)
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