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Sealand Capital (SCGL)

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Wednesday 31 October, 2018

Sealand Capital

Unaudited Interim Results

RNS Number : 9035F
Sealand Capital Galaxy Limited
31 October 2018
 

For immediate release: 31st October 2018

 

Sealand Capital Galaxy Limited

("Sealand", or the "Company")

 

Unaudited Interim Results for the six months ended 30 June 2018

 

Sealand Capital Galaxy Limited, the Company engaged in the investment in and acquisition of IT and social media businesses with high growth potential, announces unaudited Interim Results for the six months ended 30 June 2018.

 

KEY OPERATIONAL HIGHLIGHTS:

-     Successfully subscribed for a 55% interest in Guangzhou Ruiyou Information Technologies Co., Ltd ("Rightyoo"), a mobile game distributor.

-     Disposed of the Company's 100% interest in SecureCom Media Holdings Limited ("SCM"), a developer of premium services associated with Metalk, a social media app commonly used in APAC region.

-     The Group has become a party to a licensed operator agreement of the WeChat Advertisement product in the United Kingdom of Great Britain and Northern Island and the United Arab Emirates.

 

KEY FINANCIAL METRICS:

-     During the six months ended 30 June 2018, profit attributable to ordinary shareholders was £3,382,332 (2017: loss of £1,172,022 (restated)).

-     During the six months ended 30 June 2018, the revenue derived from our social media business amounted to £1,399,418 (2017: £1,629,688 (restated)).

-     Cash balance at 30 June 2018 of £758,424.

 

Nelson Law, Executive Chairman commented:

"This is the last set of results that reflect Sealand's financial and strategic history, going forward the business intends to present a new and refreshed strategy that focuses on the opportunities we have identified in the mobile payments, mobile gaming and mobile advertising sector.

 

We have already started implementing this strategy, with the Company now a licensed operator of WeChat Advertisement in the United Kingdom of Great Britain and Northern Island and the United Arab Emirates.

 

We are looking forward to presenting a Sealand of the future in the coming months and importantly creating growth and value for the benefit of our shareholders."

 

-Ends-

 

Enquiries

Sealand Capital Galaxy Limited

 

Law Chung Lam Nelson, Executive Chairman

+ 44 7537959788

 

 

Belvedere Communications

 

John West

+44 20336872756

Kim van Beeck

+44 20336872757

 

Notes to Editors:

·      Sealand Capital Galaxy Limited (LSE: SCGL) is engaged in the investment and acquisition of IT and social media businesses in the APAC region with high growth potential.

·      The Company's Shares are traded on the Official List of the London Stock Exchange's main market for listed securities under the ticker SCGL.

·      Further information on Sealand is available on its website http://www.scg-ltd.com/

 

Disclaimer

 

This announcement contains certain forward-looking statements. These statements are made by the Company's directors in good faith based on the information available to them up to the time of their approval of this announcement but such statements should be treated with caution due to inherent uncertainties, including both economic and business factors, underlying such forward-looking information. This announcement has been prepared solely to provide additional information to shareholders to assess the Group's strategies and the potential for those strategies to succeed.  This announcement should not be relied on by any other party or for any other purpose.

 

 

MANAGEMENT DISCUSSION AND ANALYSIS

 

For the remainder of the financial year, the Company will concentrate on further developing its mobile and internet related businesses including WeChat Pay services, WeChat Advertising and marketing services and mobile game distribution to retain its position as an IT focused group.

 

The Company remains focused on building a cash-flow, breakeven business. Revenue since the beginning of the second half has been similar to that seen in the first few months of the financial year, however we anticipate that revenues for the second half as a whole will see an increase on the first half due to new game launches and increased advertising revenue.

 

The Company looks forward to providing updates when new developments occur.

 

The Company intends to appoint a corporate advisor during the fourth quarter of the current financial year to heighten our visibility and efficiency in business operation and to drive revenue.

 

I would like to thank my colleagues for their continued perseverance and commitment towards reaching the Company's objectives.

 

Chung Lam Nelson Law

Chairman

31 October 2018

 

 

 

STATEMENT OF DIRECTORS' RESPONSIBILITIES

 

The Directors confirm that to the best of their knowledge: 

 

(a)  the condensed set of financial statements, which has been prepared in accordance with IAS 34 "Interim Financial Reporting", gives a true and fair view of the assets, liabilities, financial position and loss of the Group as a whole as required by DTR 4.2.4R;

 

(b)  the interim management report includes a fair review of the information required by DTR 4.2.7R (indication of important events during the first six months of the year and a description of principal risks and uncertainties for the remaining six months of the year); and

 

(c)  the interim management report includes a fair review of the information required by DTR  4.2.8R (disclosure of related parties' transactions and changes therein).

 

 

 

By order of the Board

 

 

Chung Lam Nelson Law

Chairman

31 October 2018

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

 

 

1 January 2018 to

30 June 2018

(Unaudited)

1 January 2017 to

30 June 2017

 (Unaudited)

 

1 January 2017

to

31 December 2017

(Audited)

 

 

 

Note

£

£

£

Continuing operations

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

5

82,811

-

-

 

 

 

 

 

 

Cost of services

 

 

(46,291)

-

-

 

 

 

 

 

 

Gross profit

 

 

36,520

-

-

 

 

 

 

 

 

Other income

 

5

47,247

21

204

 

 

 

 

 

 

Selling and marketing expenses

 

 

(36,993)

-

-

 

 

 

 

 

 

Administrative and other operating expenses

 

 

(599,160)

(508,608)

 

1,112,475

 

 

 

 

 

 

Loss before tax

 

 

(552,386)

(508,587)

(1,112,272)

 

 

 

 

 

 

Income tax expense

 

 

(3,807)

-

-

 

 

 

 

 

 

Loss for the period from continuing operations

 

 

(556,193)

(508,587)

 

(1,112,272)

 

 

 

 

 

 

Profit/(Loss) from discontinued operation, net of tax

 

12

3,925,142

(663,435)

 

(6,915,142)

 

 

 

 

 

 

Profit/(Loss) for the period

 

6

3,368,949

(1,172,022)

(8,027,414)

 

 

 

 

 

 

Attributable to:

 

 

 

 

 

Equity holders of the Company

 

 

3,382,332

(1,172,022)

(8,027,414)

Non-controlling interests

 

 

(13,383)

-

-

 

 

 

 

 

 

 

 

 

3,368,949

(1,172,022)

(8,027,414)

 

 

 

 

 

 

Profit/(Loss) per share attributable to equity holders of the Company

 

 

Pence

Pence

 

Pence

Basic and diluted, continuing operations

 

8

(0.001)

(0.001)

 

(0.002)

 

 

 

 

 

 

Basic and diluted, discontinued operations

 

8

0.008

(0.002)

 

(0.018)

 

 

 

 

 

 

 

 

The notes to the financial statements form an integral part of these financial statements
 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

 

1 January 2018 to

30 June 2018

(Unaudited)

1 January 2017 to

30 June 2017

 (Unaudited)

 

1 January 2017

to

31 December 2017

(Audited)

 

 

Note

£

£

£

 

 

 

 

 

Profit/(Loss) for the period

 

3,368,949

(1,172,022)

(8,027,414)

 

 

 

 

 

Other comprehensive income/(loss)

 

 

 

 

Other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods:

 

 

 

 

Exchange differences on translation of foreign operations

 

(89,728)

(106,042)

 

85,628

 

 

 

 

 

Exchange differences reclassified to profit or loss upon disposal of foreign subsidiaries

 

4,048

-

 

-

 

 

 

 

 

Net other comprehensive income/(loss) to be reclassified to profit or loss in subsequent periods and other comprehensive income/(loss) for the period, net of tax

 

(85,680)

(106,042)

 

 

 

85,628

 

 

 

 

 

 

 

 

 

 

Total comprehensive income for the period

 

3,283,269

(1,278,064)

(7,941,786)

 

 

 

 

 

 

 

 

 

 

Attributable to:

 

 

 

 

Equity holders of the Company

 

3,296,197

(1,278,064)

(7,941,786)

Non-controlling interests

 

(12,928)

-

-

 

 

 

 

 

 

 

3,283,269

(1,278,064)

(7,941,786)

 

 

 

 

 

Total comprehensive income attributable to equity holders of the Company from:

 

 

 

 

Continuing operations

 

(554,922)

(506,570)

(1,100,667)

Discontinued operations

 

3,851,119

(771,494)

(6,841,119)

 

 

 

 

 

 

 

3,296,197

(1,278,064)

(7,941,786)

 

 

 

 

 

 

 

The notes to the financial statements form an integral part of these financial statements

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

 

AT 30 JUNE 2018

 

 

 

 

 

30 June 2018

(Unaudited)

31 December 2017

(Audited)

 

 

 

 

 

Non-current assets

 

Note

£

£

Plant and equipment

 

9

19,092

14,209

Goodwill and intangible assets

 

10

104,880

-

 

 

 

 

 

 

 

 

123,972

14,209

 

 

 

 

 

Current assets

 

 

 

 

Amounts due from directors

 

 

1,515

1,808

Trade receivables

 

 

21,866

-

Prepayment and other receivables

 

 

385,976

2,060,691

Cash and cash equivalents

 

 

758,424

1,772,507

 

 

 

 

 

 

 

 

1,167,781

3,835,006

 

 

 

 

 

Current liabilities

 

 

 

 

Deferred Revenue

 

 

-

4,775,684

Trade payables

 

 

14,732

-

Other payables and accrued expense

 

 

80,608

1,274,282

 

 

 

 

 

 

 

 

95,340

6,049,966

 

 

 

 

 

Net current (liabilities)/assets

 

 

1,072,441

(2,214,960)

 

Net (liabilities)/assets

 

 

 

1,196,413

 

(2,200,751)

 

 

 

 

 

Equity attributable to equity holders of the Company

 

 

 

 

Share capital

 

 

50,405

50,405

Share premium

 

 

5,988,022

5,988,022

Exchange reserve

 

 

(507)

85,628

Accumulated losses

 

 

(4,942,474)

(8,324,806)

 

 

 

 

 

 

 

 

1,095,446

(2,200,751)

 

 

 

 

 

Non-controlling interests

 

 

100,967

-

 

 

 

 

 

Total equity

 

 

1,196,413

(2,200,751)

 

 

 

 

 

 

 

The notes to the financial statements form an integral part of these financial statements

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

Attributable to equity holder of the Company

 

 

 

Share

capital

Share

premium

Accumulated

Losses

Exchange

Reserve

Total

Non-controlling interests

Total Equity

 

£

£

£

£

£

£

£

SIX MONTHS ENDED 30 JUNE 2017

 

 

 

 

 

 

At 1 January 2017 (Audited)

3,000

735,350

(297,392)

-

440,958

-

440,958

 

Comprehensive (loss)/ income

 

 

 

 

 

 

 

 

Loss for the period (restated)

-

-

(1,172,022)

-

(1,172,022)

-

(1,172,022)

 

 

 

 

 

 

 

 

Exchange differences arising on translation (restated)

-

-

-

(106,042)

(106,042)

 

-

 

(106,042)

 

 

 

 

 

 

 

 

Total comprehensive (loss)/ income for the period (restated)

-

-

(1,172,022)

(106,042)

(1,575,456)

 

 

-

 

 

(1,575,456)

 

 

 

 

 

 

 

 

Placing of shares

1,700

3,398,300

-

-

3,400,000

-

3,400,000

 

 

 

 

 

 

 

 

Bonus issue

42,300

(42,300)

-

-

-

-

-

 

 

 

 

 

 

 

 

At 30 June 2017 (restated) (Unaudited)

47,000

4,091,350

(1,469,414)

(106,042)

2,562,894

 

-

 

2,562,894

 

 

 

 

 

 

 

 

SIX MONTHS ENDED 30 JUNE 2018

 

 

 

 

 

 

At 1 January 2018 (Audited)

50,405

5,988,022

(8,324,806)

85,628

(2,200,751)

-

-

 

 

 

 

 

 

 

 

Comprehensive (loss)/ income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Profit for the period

-

-

3,382,332

-

3,382,332

(13,383)

3,368,949

 

 

 

 

 

 

 

 

Exchange differences arising on translation

-

-

-

(90,183)

(90,183)

 

455

 

(89,728)

 

 

 

 

 

 

 

 

Exchange differences reclassified to profit or loss upon disposal of foreign subsidiaries

-

-

-

4,048

4,048

 

 

-

 

 

4,048

 

 

 

 

 

 

 

 

Total comprehensive (loss)/ income for the period

-

-

3,382,332

(86,135)

3,296,197

 

(12,928)

 

3,283,269

 

 

 

 

 

 

 

 

Non-controlling interests arising from business combination

-

-

-

-

-

 

113,895

 

113,895

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

At 30 June 2018 (Unaudited)

50,405

5,988,022

(4,942,474)

(507)

1,095,446

100,967

1,196,413

 

 

 

 

 

 

 

 

 

The notes to the financial statements form an integral part of these financial statements

 

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

Attributable to equity holder of the Company

 

 

 

Share

capital

Share

premium

Accumulated

Losses

Exchange

Reserve

Total

Non-controlling interests

Total Equity

 

£

£

£

£

£

£

£

TWELVE MONTHS ENDED 31 DECEMBER 2017

 

 

 

 

 

At 1 January 2017 (Audited)

3,000

735,350

(297,392)

-

440,958

-

440,958

 

Comprehensive (loss)/ income

 

 

 

 

 

 

 

 

Loss for the year

-

-

(8,027,414)

-

(8,027,414)

-

(8,027,414)

 

 

 

 

 

 

 

 

Exchange differences arising on translation

-

-

-

85,628

85,628

 

-

 

85,628

 

 

 

 

 

 

 

 

Total comprehensive (loss)/ income for the year

-

-

 

(8,027,414)

 

85,628

(7,941,786)

 

-

 

(7,941,786)

 

 

 

 

 

 

 

 

Placing of shares

5,105

5,615,395

-

-

5,620,500

-

5,620,500

 

 

 

 

 

 

 

 

Bonus issue

42,300

(42,300)

-

-

-

-

-

 

 

 

 

 

 

 

 

Costs of issue

-

(320,423)

-

-

(320,423)

-

(320,423)

 

 

 

 

 

 

 

 

At 31 December 2017 (Audited)

50,405

5,988,022

(8,324,806)

85,628

2,562,894

-

(2,200,751)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The notes to the financial statements form an integral part of these financial statements

 

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

CONSOLIDATED STATEMENT OF CASH FLOWS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

 

 

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

1 January 2017

to

31 December 2017

(Audited)

 

 

 

£

£

£

OPERATING ACTIVITIES

 

Note

 

 

 

Profit/(loss) before tax

 

15

3,368,949

(1,172,022)

(8,027,414)

 

 

 

 

 

 

Adjustments for:

 

 

 

 

 

  Depreciation

 

 

5,149

173

4,969

Amortisation

 

 

-

240,793

587,553

  Gain on disposal of a subsidiary

 

 

3,809,051

-

-

  Provision for impairment loss on goodwill

 

 

 

 

5,997,734

  Provision for impairment loss on intangible assets

 

 

 

 

1,586,394

  Bank interest income

 

 

(200)

(43)

(243)

 

 

 

 

 

 

Operating cash flows before movements in working capital

 

 

(435,153)

(931,099)

148,993

 

 

 

 

 

 

(Decrease)/increase in prepayment and other receivables

 

 

59,460

9,992,573

10,514,918

Decrease in amount due to a director

 

 

293

-

-

Increase in trade receivables

 

 

(14,293)

-

-

(Decrease)/increase in deferred revenue

 

 

(1,318,415)

5,581,331

(15,572,143)

Increase/(decrease) in other payables and accrued expenses

 

 

844,283

(16,346,052)

2,713,701

Decrease in trade payables

 

 

(104,016)

-

-

 

 

 

 

 

 

Net cash used in operating activities

 

 

(967,841)

(1,703,247)

(2,194,531)

 

 

 

 

 

 

INVESTING ACTIVITY

 

 

 

 

 

  Purchase of property, plant and equipment

 

 

(6,029)

(2,837)

(18,360)

  Net cash inflow on acquisition of subsidiaries

 

 

10,475

325,884

325,884

Net cash outflow on disposal of a subsidiary

 

 

(37,433)

-

(55,090)

  Interest income received

 

 

200

43

243

 

 

 

 

 

 

Net cash (used in)/generated from investing activities

 

 

(32,787)

323,090

252,677

 

 

 

 

 

 

FINANCING ACTIVITY

 

 

 

 

 

  Proceeds from issue of shares, net of expenses

 

 

-

1,400,000

3,300,077

 

 

 

 

 

 

Net cash generated from financing activities

 

 

-

1,400,000

3,300,077

 

 

 

 

 

 

Net (decrease)/increase in cash and cash equivalents

 

 

(1,000,628)

19,843

1,358,223

 

 

 

 

 

 

Exchange realignment

 

 

(13,455)

(17,739)

(43,313)

 

 

 

 

 

 

Cash and cash equivalents at the beginning of the period/year

 

 

1,772,507

457,597

 

457,597

 

 

 

 

 

 

Cash and cash equivalents at the end of the period/year

 

 

758,424

459,701

1,772,507

 

 

 

 

 

 

               

 

The notes to the financial statements form an integral part of these financial statements

 

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

1.     GENERAL INFORMATION

 

Sealand Capital Galaxy Limited (the "Company") was incorporated in the Cayman Islands on 22 May 2015 as an exempted Company with limited liability under the Companies Law. The registered office of the Company is Willow House, PO Box 709, Cricket Square, Grand Cayman, KY1-1107, Cayman Islands.

 

The consolidated interim financial statements for the six months ended 30 June 2018 have not been reviewed or audited by the Company's auditors.

 

 

2.       BASIS OF PREPARATION

 

The unaudited consolidated interim financial statements for the six months ended 30 June 2018 have been prepared in accordance with International Accounting Standard ("IAS") No. 34 "Interim Financial Reporting". This consolidated interim financial statement does not include all the notes of the type normally included in an annual report. This consolidated interim financial statement is to be read in conjunction with the Company's annual report for the year ended 31 December 2017, and any public announcements made by the Company during the interim reporting period. The annual financial report for the year ended 31 December 2017 was prepared in accordance with International Financial Reporting Standards ("IFRSs") as adopted for use by the European Union and the accounting policies applied in this consolidated interim financial statement are consistent with the polices applied in the annual financial report for the year ended 31 December 2017 unless otherwise noted. The annual financial statements for the year ended 31 December 2017 were approved by the Board of Directors on 29 October 2018. The report of the auditors on those financial statements was qualified in respect of issues arising from the now disposed of trade of SecureCom. Due to the disposal of SecureCom, the social media business under the name of Metalk was treated as a discontinued operation and the result from this discontinued operation was separately shown in the statement of profit and loss. Detailed financial result and position of the discontinued operation was disclosed in Note 12.

 

 3.      ESTIMATES AND JUDGEMENTS

 

The preparation of an interim financial report in conformity with IAS 34 requires management to make judgements, estimates and assumptions that affect the application of policies and reported amounts of assets and liabilities, income and expenses on a year to date basis. Actual results may differ from these estimates.

 

The estimates and underlying assumption are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision affects only that period, or in the period of the revision and future periods if the revision affects both current and future periods

 

Key sources of estimation uncertainty

 

Valuation of identifiable assets and liabilities acquired through business combinations

 

The Group applies the acquisition method to account for business combinations, which requires the Group to recognise assets acquired and liabilities assumed at their fair values on the date of acquisition. Significant judgement is used to estimate the fair values of the assets and liabilities acquired, including estimating future cash flows from the acquired business, determining appropriate discount rates and other assumptions. The acquisition of Rightyoo during the six months ended 30 June 2018 is accounted for as business combination and details of the fair value of the assets acquired and liabilities recognised at the date of acquisition are set out in Note 11.

 

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

4.       SEGMENT INFORMATION

 

The Chief Operating Decision Maker ("CODM") has been identified as the executive directors of the Company who reviews the Group's internal reporting in order to assess performance and allocate resources. The CODM has determined the operating segments based on these reports.

          

For management purposes, the Group is organised into business units based on their products and services, and has reportable operating segments for the six months ended 30 June 2018 as follows:

 

(a)      The social media segment includes sales of secured social communication and advertising product through             Metalk;

(b)      The mobile payment segment includes services on enlisting merchants to mobile payment gateways; and

(c)      The mobile game segment includes sales and distribution of mobile game.

 

For the six months ended 30 June 2018 (unaudited)

 

Continuing

Operations

 

Discontinued operations

 

 

 

Mobile payment

Mobile

Game

Unallocated

Subtotal

Social media

Total

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Revenue

1,382

81,429

-

82,811

1,316,607

1,399,418

Segment gain/(loss)

(85,763)

(29,503)

(440,927)

(556,193)

3,925,142

3,368,949

Current assets

129,673

144,915

893,193

1,167,781

-

1,167,781

Non-current assets

2,770

108,410

12,792

123,972

-

123,972

Liabilities

251

27,609

67,480

95,340

-

95,340

 

For the six months ended 30 June 2017 (restated) (unaudited)

 

Mobile payment

Mobile

Game

Unallocated

Subtotal

Social media

Total

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Revenue

-

-

-

-

1,629,688

1,629,688

Segment loss

-

-

(508,586)

(508,586)

(663,435)

(1,172,022)

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

4.       SEGMENT INFORMATION (CONTINUED)

 

For the Twelve months ended 31 December 2017 (Audited)

 

 

 

Mobile payment

Mobile

Game

Unallocated

Subtotal

Social media

Total

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Revenue

-

-

-

-

4,491,997

4,491,997

Segment loss

(49,510)

(8,051)

(1,054,711)

(1,112,272)

(6,915,142)

(8,027,414)

Current assets

-

200,482

1,610,552

1,755,944

2,079,062

3,835,006

Non-current assets

-

-

13,837

13,837

372

14,209

Liabilities

14,225

7,193

107,995

129,413

5,920,553

6,049,966

 

Information about major customers

 

For the six months ended 30 June 2018, there are no single external customers who contributed more than 1% revenue of the Group.

 

5.    REVENUE AND OTHER INCOME

 

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

1 January 2017

to

31 December 2017

(Audited)

 

REVENUE

 

£

£

£

Revenue from provision of advertising services *

 

4,491,997

1,629,688

4,491,997

Revenue from distribution of mobile gaming

 

81,429

-

 

Commission income

 

1,382

-

 

 

 

 

 

 

 

 

1,399,418

1,629,688

 

 

 

 

 

 

OTHER INCOME

 

 

 

 

Handling fee income *

 

-

29,609

119,368

Bank interest income

 

200

43

243

Government subsidy

 

45,659

-

-

Others

 

1,391

-

-

 

 

 

 

 

 

 

47,250

29,652

119,611

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

 

6.    LOSS BEFORE TAX

 

Loss before tax has been arrived at after charging:

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

1 January 2017

to

31 December 2017

(Audited)

 

£

£

£

 

 

 

 

Amortisation

-

240,793

2,173,947

Depreciation

5,149

173

4,969

Exchange gains, net

14,938

581,854

786,010

Gain on disposal of a subsidiary

3,809,051

-

-

Provision for impairment losses on goodwill

-

-

5,997,734

Provision for impairment losses on intangible

  assets

 

-

 

-

 

1,586,394

Staff cost (include Director Remuneration)

230,954

214,758

439,846

 

 

 

 

 

7.       EMPLOYEES

 

The average number of employees during the year was made up as follows:

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

1 January 2017

to

31 December 2017

(Audited)

 

 

 

 

Directors

 

4

4

4

Staff

4

6

5

 

Director Remuneration was as follows:

 

 

1 January 2018

to

30 June 2018

(Unaudited)£

1 January 2017

to

30 June 2017

(Unaudited)

1 January 2017

to

31 December 2017

(Audited)

 

 

 

 

 

Directors Remuneration

 

 

162,000

110,000

439,846

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

8.     PROFIT PER SHARE

 

Basic and diluted profit per share

 

Basic profit per share is calculated by dividing the profit attributable to equity holders of the Company of £3,382,332 (six months ended 30 June 2017: loss attributable to equity holders of the Company of £1,172,022 and twelve months ended 31 December 2017: loss attributable to equity holders of the Company of £8,027,414) by the weighted average number of 504,050,000 ordinary shares (six months ended 30 June 2017: 415,524,862 and twelve months ended 31 December 2017: 454,154,384) in issue during the six months ended 30 June 2018.

 

Diluted profit per share was the same as basic profit per share as there were no potential dilutive ordinary shares outstanding for the six months ended 30 June 2018 and 2017 and the twelve months ended 31 December 2017.

 

9.      PLANT AND EQUIPMENT

 

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

 

£

£

 

 

 

At 1 January

14,209

-

Additions

6,029

2,837

Acquisition of subsidiaries

4,171

640

Depreciation for the period

(5,149)

(173)

Disposal of subsidiaries

(253)

-

Exchange realignment

85

(97)

 

 

 

At 30 June

19,092

3,207

 

 

 

1 January 2017

to

31 December 2017

(Audited)

 

 

£

At 1 January

 

-

Additions

 

18,360

Acquisition of subsidiaries

 

640

Depreciation for the period

 

(4,969)

Disposal of subsidiaries

 

-

Exchange realignment

 

178

 

 

 

At 31 December

 

14,209

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

10.    GOODWILL AND INTANGIBLE ASSETS

 

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

 

£

£

At 1 January (Audited)

-

-

Acquisition of subsidiaries

104,438

8,472,100

Amortisation for the period

-

(240,793)

Exchange realignment

442

(356,774)

 

 

 

At 30 June (Unaudited)

104,880

7,874,533

 

 

 

 

 

 

1 January 2017

to

31 December 2017

(Audited)

 

 

£

At 1 January (Audited)

 

-

Acquisition of subsidiaries

 

8,472,100

Amortisation for the year

 

(587,553)

Provision for impairments for the year

 

(7,584,128)

Exchange realignment

 

(300,419)

 

 

 

At 30 June (Unaudited)

 

-

 

 

 

 

For six months ended 30 June 2017, Goodwill and intangible assets was arising from the acquisition of the 100% equity interest in SecureCom Media Holdings Limited. Full provision for impairment losses was made as at 31 December 2017.

 

For six months ended 31 December 2018, Goodwill and intangible assets was arising from the Subscription of the 55% equity interest in Guangzhou Ruiyou Information Technologies Co., Ltd ("Rightyoo").

 

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

11.     BUSINESS COMBINATIONS

 

Business combination for the six months ended 30 June 2018

 

In October 2017, the Company entered into a Subscription Agreement with Rightyoo and its shareholders, in which the Company agreed to subscribe for a 55% interest in Rightyoo for the aggregate sum of RMB1,222,000 (approximately GBP 139,201) (the "Subscription"), which was satisfied by a cash payment. Rightyoo is PRC-incorporated mobile games developer and distributor which has been active since 2015. It primarily develops apps for the personalisation of user mobile devices, as well as being a distributor and publisher for third party developers. This acquisition has been accounted for using the acquisition method. The acquisition was completed on 9 January 2018.

 

Acquisition-related costs were insignificant and have been excluded for the consideration transferred and have been recognised as an expense for the six months ended 30 June 2018, within the "administrative expenses" in the consolidated statement of profit or loss.

 

The fair value of the identifiable assets acquired and liabilities recognised at the date of acquisition as follows:

 

 

 

 

(Unaudited)

£

Plant and equipment

 

 

4,171

Trade receivables

 

 

7,573

Prepayment and other receivables

 

 

111,300

Cash and cash equivalents

 

 

10,475

Trade payables

 

 

(118,748)

Other payables and accrued expense

 

 

(5,314)

Goodwill and intangible assets

 

 

104,438

 

 

 

 

 

 

 

113,895

Add: Fair value of the subscribed shares

 

 

139,201

 

 

 

 

 

 

 

253,096

 

 

 

 

The fair value of the identifiable assets acquired and liabilities recognized at the date of acquisition in this interim report was assessed by the management with their reasonable estimation. The Group is going to engage professional party to perform a detailed purchase price allocation (the 'PPA') exercise. As a result, the final assessment in the PPA regarding the fair value of the identifiable assets acquired and liabilities may defer from the estimation of the management.

 

Goodwill arose in the above business combination as the cost of combination included a control premium. In addition, the consideration paid for the combination effectively included amounts in relation to the benefit of expected synergies, revenue growth, future market development and the assembled workforce. These benefits are not recognised separately from goodwill because they do not meet the recognition criteria for identifiable intangible assets. None of the goodwill arising on the above acquisition is expected to be deductible for tax purposes.

 

Included in the Group's revenue and loss for the six months ended 30 June 2018, revenue of approximately £81,429 and loss of approximately £29,503 were attributable to Rightyoo.

 

As the acquisition date of 9 January 2018 was closed to the beginning of the interim period, had the acquisition of Rightyoo been taken place on 1 January 2018, the management believed that the consolidated revenue and profit for the six months ended 30 June 2017 of the Group would have not been any material difference from above.

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

12.     DISCONTINUED OPERATIONS

 

The Group's social media business was operated by its wholly owned subsidiary, SecureCom Media Holding Limited ("SecureCom"). Due to the deterioration in SecureCom's performance, the Group had entered a MoU on 19 April 2018 and a legally binding agreement on 12 June 2018 with a buyer to dispose of the entire interest in SecureCom. On 22 June 2018, the disposal was completed and the social media business is treated as a discontinued operating.

 

An analysis of the discontinued operation is as follows:

 

a)     Net loss on disposal of discontinued operations

 

 

 

2018

(Unaudited)

2017

(Unaudited)

 

 

 

 

£

£

Operating profit/(loss) from discontinued operations

 

 

116,091

(663,435)

Gain on disposal of a subsidiary

 

 

3,809,051

-

 

 

 

 

 

 

 

 

3,925,142

(663,435)

b)    Operating profit/(loss) from discontinued operations

 

 

 

 

2018

(Unaudited)

2017

(Unaudited)

 

 

 

 

£

£

Revenue

 

 

1,316,607

1,629,688

Other income

 

 

3

29,631

Selling and marketing expenses

 

 

(765,178)

(1,820,676)

Administrative and other operating expenses

 

 

(435,341)

(502,078)

 

 

 

 

 

Profit/(loss) before income tax

 

 

116,091

(663,435)

Income tax charge

 

 

-

-

 

 

 

 

 

Profit/(loss) for the period

 

 

116,091

(663,435)

 

 

 

 

 

c)     Profit on disposal of interest

 

 

 

 

(Unaudited)

£

 

Proceeds from disposal

 

 

10,000

Add: Net liabilities disposed

 

 

3,803,099

Eliminate translation reserve

 

 

(4,048)

 

 

 

 

Profit on disposal of interest

 

 

3,809,051

 

 

 

SEALAND CAPITAL GALAXY LIMITED

 

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

 

FOR THE SIX MONTHS ENDED 30 JUNE 2018

 

12.     DISCONTINUED OPERATIONS (CONTINUED)

 

d)    Net liabilities disposed                                                                                   (Unaudited)

 

 

 

£

Plant and equipment

 

 

253

Prepayment and other receivables

 

 

1,760,006

Cash and cash equivalents

 

 

47,433

Deferred Revenue

 

 

(3,507,104)

Other payables and accrued expense

 

 

(2,103,687)

 

 

 

 

Net liabilities disposed

 

 

 

(3,803,099)

13.     RELATED PARTY TRANSACTIONS

 

(a)   Details of the compensation of key management personnel was disclosed in Note 7 to the financial statements.

 

(b)   Apart from the balances with related parties at the end of the reporting period disclosed elsewhere in the financial statements, the Company had not entered into any other significant related party transactions for the year.

 

14.     EVENTS AFTER THE REPORTING PERIOD

 

[N/A]

 

15.    CASH FLOWS ATTRIBUTABLE TO THE DISCONTINUED OPERATION

 

 

1 January 2018

to

30 June 2018

(Unaudited)

1 January 2017

to

30 June 2017

(Unaudited)

1 January 2017

to

31 December 2017

(Audited)

 

 

£

£

£

 

NET CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

  Continued Operations

 

(890,660)

(200,623)

(761,038)

 

  Discontinued operations

 

(77,474)

(1,502,624)

(1,433,493)

 

 

 

 

 

 

 

 

 

(968,134)

(1,703,247)

(2,194,531)

 

 

 

 

 

 

 

NET CASH FLOWS FROM INVESTMENT ACTIVITIES

 

 

 

 

 

  Continued Operations

 

4,643

(2,816)

(73,242)

 

  Discontinued operations

 

(37,430)

325,906

325,919

 

 

 

 

 

 

 

 

 

(32,787)

323,090

252,677

 

 

 

 

 

 

 

NET CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

  Continued Operations

 

-

-

-

 

  Discontinued operations

 

-

1,400,000

3,300,077

 

 

 

 

 

 

 

 

 

-

1,400,000

3,300,077

 

 

 

 

 

 

 

             

 


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