StockMarketWire.com - Animal feed supplier Walcom Group said it expected its revenue in the first half to be substantially lower on-year due to an outbreak of swine flu in China.

The company said that it had not lost any major customers, with the decline in sales directly related to a severe reduction in the swine population.

'The company is actively working to increase its customer base and is hopeful that trading conditions in this market will improve in the second half of the year,' Walcom said.

'In addition, the company is also focusing on increasing sales penetration within the poultry feed sector and is hopeful it will see the benefit of this in the fourth quarter of the financial year.'

Walcom said it was still owed HK$5.4m by a large Chinese customer, against which it had commenced legal proceedings for which an an update was expected in the coming weeks.

The company said its bank had also offered to provide with with a RMB1.0m loan shortly after it is due to repay a current RMB1.5 loan by 10 June.

The bank had also agreed in principle to issue of a further loan of RMB0.5m should the company's trading stabilise.

Walcom said it expected to be able to meet its liabilities as they fall due until at least the end of August.

'The group continues to closely monitor its working capital position and continues to seek further investment in the business to safeguard its liquidity,' it added.


At 1:12pm: [LON:WALG] Walcom Group Ltd share price was 0p at 0.38p



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