CORDLIFE GROUP, whose share price last traded at $1.365 yesterday, has declared a 13-cent special dividend.

The special dividend -- totalling S$33.7 million -- will be paid on 3 December.

The dividend is derived from the proceeds of the disposal of Cordlife's holding of 7,314,015 ordinary shares in China Cord Blood Corporation (CCBC) and convertible notes of CCBC.

Cordlife had earlier estimated that it would have a net cash inflow of S$95.8 million arising from the sale of its CCCBC  stake and the settlement of related borrowings.

From the sale, Cordlife will recognise a net gain of S$31,742,000. This does not include various gains which have been recognised in the income statement from the dates of acquisition up to the end of 3QFY2015 (ended Sept 30).

The sale of the shares and convertible notes was completed recently in Oct and Nov, respectively, which was about six months after Cordlife announced that it had entered into a conditional agreement to sell the stake to Golden Meditech Holdings.

The rest of the proceeds from disposal may be used for the Group's future business expansion, or be used to deleverage the financial position of the Group and/or for distribution to shareholders of the Group.

 

JeremyYee TV1.15

"In China, we will be proactively exploring either collaboration opportunities with leading research hospitals or mergers and acquisitions, in addition to our existing partnership with CCBC in order to extend our products and services to more families in the country." -- Jeremy Yee, CEO, Cordlife Group (photo).

Separately, Cordlife, a mother and child consumer healthcare company, reported a 4.5% year-on-year increase in profit before income tax from operations for the quarter ended 30 September 2015 (“1QFY2016”) of S$1.8 million.

Revenue increased by 9.7%, or S$1.3 million, from S$13.3 million in 1QFY2015 to S$14.5 million in 1QFY2016 due to an increase in the number of client deliveries from approximately 5,100 in 1QFY2015 to approximately 5,300 in 1QFY2016.

The Group said the result stemmed from its efforts in expanding its reach to more cities in India, Indonesia and Philippines as well as increased educational and marketing activities in Singapore and Hong Kong to raise customers’ awareness of the importance of cord blood and cord lining banking.

General offer for StemLife

In another development, last Thursday (12 Nov), Cordlife acquired an additional 3 million ordinary shares in StemLife Berhad, which is listed on the ACE Market of Bursa Malaysia, for a total of RM1.35 million (approximately S$441,000) or RM0.45 per StemLife Share.

As a result, Cordlife’s shareholding interest in StemLife increased from 31.81% to 33.03%, and Cordlife has extended a mandatory take-over offer of the company.

The aggregate consideration for the takeover based on the offer price of RM0.45 is RM74.6 million (approximately S$24.4 million). The offer price is a 7.14% premium to the closing price of RM0.4162 for StemLife shares on 11 November 2015.

The takeover will be funded from the cash reserves of Cordlife.

Aside from the Malaysian market, StemLife has exposure to the Thai market as it owns 40% of Thai StemLife Co. Ltd., the largest cord blood banking company in Thailand.

Mr Yee, the CEO of Cordlife, said: "At the point of our initial investment into StemLife in October and December 2013, we had already identified many potential synergies between the Group’s business and the business of StemLife, including economies of scale and scope in all of StemLife’s service/product offerings in Malaysia.

"We believe that greater control of StemLife would allow the Group to achieve higher earnings both as a result of increasing its penetration in the Malaysian market and greater cost synergies from fully integrating and streamlining the operations in Malaysia. In addition, greater control of StemLife would allow the Group the flexibility to plan and execute long term strategy for its operations in Malaysia.

"The transaction is aligned with our strategies and plans to extend our outreach in the countries we are either operating in or have an interest in, and to grow both in scale and in scope through the provision of a wider range of complementary products and services."

For more information on the 1QFY16 results, see Cordlife's press release here.


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