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DJ DagangHalal PLC First Day of Dealings on ISDX Growth Market

TIDMDGHL

RNS Number : 4337U

DagangHalal PLC

07 April 2016

7(th) April 2016

FIRST DAY OF DEALINGS ON ISDX GROWTH MARKET

London - DagangHalal plc ("DagangHalal", the "Company", the "Group"), the world's first global e-marketplace to address the need for Halal verification, is pleased to announce that, with effect from 8.00 a.m. today, the Group's entire issued share capital, comprising 58,488,442 ordinary shares, will commence trading on the ISDX Growth Market under the "ticker" DGHL.

Admission Details

-- Gross proceeds of approximately GBP4.2 million has been raised by way of a Subscription of approximately GBP3.9m from Malaysian investors (the "Subscription") and a Placing of approximately GBP0.3m from UK investors (the "Placing")

-- The Subscription raised approximately MYR 22.4 million as part of a pre-admission fundraising including approximately MYR 5.4 million from the Malaysia Technology Development Corporation, a wholly owned subsidiary of Khazanah Nasional Malaysia, the sovereign wealth fund of the Government of Malaysia

-- The Placing raised gross proceeds of approximately GBP0.3 million from UK investors through the placing of 1.2 million new shares at the placing price of 25p (the "Placing Price")

-- The total number of Ordinary Shares in issue at admission is 58,488,442 giving the Group a market capitalisation at the Placing Price of approximately GBP14.6 million

-- The Group intends to use the net proceeds of approximately GBP3.6 million to accelerate its growth strategy, in particular through expanding its sales and marketing department, and by entering into new territories

-- The Group's ISDX Growth Market stock code or "ticker" is DGHL and the Group's ISIN code is JE00BYXF0V09

Arden Partners plc ("Arden Partners") is acting as Corporate Adviser and Joint Broker to the Company. Optiva Securities Ltd ("Optiva") is acting as Joint Broker and Ingenious Haus (UK) Ltd ("Ingenious Haus") is acting as Financial Adviser.

Mohamed Hazli Mohamed Hussain (Hazli), DagangHalal's CEO said:

"I am very pleased that DagangHalal has joined the ISDX Growth Market which is a milestone event for us. Having considered various exchanges, we believe that ISDX is the most appropriate market for DagangHalal at the current time."

"With clear strategy in place and favourable market trends, including widespread internet use and smartphone adoption across the world's Muslim population, DagangHalal now has the opportunity to further its position as a focal centre for Halal trade, one of the largest global markets."

* * * * *

For further information please contact:

 
 DagangHalal                         via FTI Consulting 
 Mohamed Hazli Mohamed Hussain 
  (Chief Executive Officer) 
 Ali Sabri Sani Abdullah (Chief 
  Financial Officer) 
 
                                     +44 (0) 20 
 Arden Partners                       7614 5900 
 James Felix / Patrick Caulfield 
                                     +44 (0)20 
 Optiva                               3137 1902 
 Vishal Balasingham 
 
                                     +44 (0) 20 
 FTI Consulting                       3727 1000 
 Chris Lane / Rob Mindell / Elena 
  Kalinskaya 
 

* * * * *

Notes to editors

Halal market

The Halal market is divided into food and non-food sectors. As of today, the largest of these markets (excluding Islamic finance) is the Halal food and beverages sector which includes meat, poultry, fish, dairy produce, edible vegetables, fruit and nuts, as well as processed foods and many non-alcoholic beverages.

Food & Beverage

The awareness and observance of Halal is undeniably the greatest within this sector, and the Directors' believe that adherence to Halal compliance by food and beverage producers is of the utmost importance. Indeed, the food and beverages sector constitutes over 60% of the global market potential for Halal products, of which primary meats, processed goods, baked goods and confectionary constitute approximately 35%.

The Halal Market Opportunity

The exchange of goods between businesses and consumers has traditionally been conducted via trading platforms such as catalogues, trade shows or through third-party intermediaries such as distributors and traders. Such forms of engagement can often carry elements of inefficiency making trading time consuming and difficult for buyers and merchants. The fragmented and regional nature of these marketplaces often compounds the effect of these inefficiencies, making the transactions difficult and expensive. The advent of the Internet has seen the creation of a multitude of online marketplaces or e-marketplaces which overcome many of these inefficiencies. Within the context of the Halal industry there have also been several e-marketplaces which have emerged, of which DagangHalal.com is one. As such the Group operates within the global Halal e-commerce trade market which is driven by several factors, including, but not limited to, the rising spending power of Muslim consumers (which according to Smith Zander is projected to increase from USD2.9 trillion in 2010 to USD 3.8 trillion by 2015 and to USD 5.3 trillion by 2020), increasing internet penetration and internet connected mobile phone penetration, increasing trends in online shopping and the rapid development of distributed logistics infrastructure and express delivery networks. For example, global expenditure on Halal trade is expected to grow from USD 1.7 trillion in 2012 to USD 2.67 trillion in 2018 at a Compound Annual Growth Rate ("CAGR") of 7.8%. Furthermore, the increasing availability of cheap and reliable technology for secure transactions has led to a significant growth in online sales, and global e-commerce sales grew from USD561 billion in 2010 to USD963.0 billion in 2013. E-commerce activities in Asia and the rest of the world were primarily driven by rapidly increasing computer and internet penetration. According to Smith Zander, global e-commerce sales are further expected to grow to USD1.4 trillion in 2015 and USD4.9 trillion in 2020.

The Business

There are three principal strands to the Group's business:

   --     E-marketplace, e-commerce and web solutions 

o DagangHalal.com

o Halal Trade Manager System

o E-commerce Advanced Solutions

   --     Halal Certificate Repository 

o HVE

o HCMS

   --     Halal events, training, education and consultancy business 

o HMAG

o International and local trade fairs and nationwide (Malaysia) consumer carnivals

o Halal training course

E-marketplace, e-commerce and web solutions

DagangHalal.com

DagangHalal.com enables both B2B product and service listings as well as B2C sales for independent merchants looking to sell verified Halal products. The Group does not purchase or hold any products as inventory but helps sellers optimise the selling of their Halal products or services to potential buyers. The Group monetises its e-marketplace by selling year long merchant packages which enable independent merchants to list their Halal products or services on the e-marketplace website. There are three fee earning twelve month subscription packages, trade, silver and gold; which vary in terms of the number of products which can be listed, the number of trade categories which the merchant can showcase a product in and the search priority on the DagangHalal.com e-marketplace relative to other merchants.

Halal Certificate Repository:

The HVE (halalverified.com) is the world's first Halal repository designed to ensure accurate Halal verification and expedite the Halal-certification process for applicants. Currently hosted on Microsoft's cloud services, namely Windows Azure and SQL Server, HVE allows the public to "verify with just one click" the veracity and validity of Halal certificates from international Halal verification bodies recognised by JAKIM, for both local and imported products. It also simplifies the time and cost consuming processes to verify the Halal status of ingredients or components in a supply chain that come from other countries with the support and up-to-date information shared by the CBs which are recognised by JAKIM. HVE allows CBs to verify the authenticity of the certificates submitted from applicants for Halal certificates (Halal Applicants). Moreover, the CBs can utilise the system to help market the certificate holders to international buyers.

In order for a business to market its product as Halal to the standards of JAKIM or to the standards of one of the JAKIM recognised CBs, it must first obtain approval from one of these parties. The process of Halal certification is divided into two stages, a documentation phase and an audit phase. In the documentation phase, an applicant will prepare its application by collating the various Halal certificates from differing suppliers via phone, fax and email to prove the Halal status of each of the ingredients that they use in the their product. The applicant may also need to identify the alternative suppliers if their initial suppliers are not Halal certified by JAKIM or a JAKIM recognised CBs. The Directors believe that such processes can make the application process time-consuming.

Once an application has been prepared and approved by the issuing CB this is followed up with an audit. During this audit the issuing CB will check the validity of the statements made relating to the processes on the application form and review the hygiene practices of the staff amongst other factors. Once an applicant has successfully completed both stages, they will typically be issued with a Halal certificate.

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DJ DagangHalal PLC First Day of Dealings on ISDX -2-

The HVE system originated as a concept in April 2012, when JAKIM and the Group entered into the Smart Partnership Agreement to cooperate on the establishment of the HVE. Following further discussions with JAKIM, a cooperation agreement was signed on 11 July 2014. As part of this agreement DagangHalal.com was to create a database which would benefit the public, members from the food and beverage industry seeking Halal certification from JAKIM, and JAKIM-recognised CBs. Once issued, a certificate is typically valid for between one and two years.

The Directors believe that the HVE provides a solution to entities within the Halal industry needing to obtain verified and current Halal certificates, including halal applicants, Certification Bodies, supplier and manufacturers, consumers, and trade and custom officials.

Halal events, training, education and consultancy business:

International and local trade fairs

The Group has organised events and trade fairs and seeks to attend local and international trade fairs. The Group co-organised a number of "1Malaysia1Halal" carnivals with JAKIM between 2010 and 2012. In 2012, the Group co-organised a three day carnival aimed at educating the public about non-recognised Halal logos and certificates provided by food manufacturers. The Group generated revenue by selling sponsorship packages and merchant packages, which enabled merchants to hold a stall to promote and sell their products. The Group did not host any carnivals in 2013, 2014 or 2015 due to a switch of focus towards the development of the HVE and HCMS. It is the Group's intention to resume hosting its own carnivals post Admission in 2016.

HMAG

The Group writes and publishes a quarterly Halal trade magazine, HMAG, which features industry articles and advertisements. The articles focus on the Halal industry, including information about upcoming trade fairs and features interviews with prominent Halal industry figures. The Group generates advertising revenue by selling advertising space in the magazine which it then distributes at trade fairs it attends.

Halal training courses

Since September 2014, the Group has offered training courses for potential applicants or existing certificate recipients. Each training session attracts a fixed fee and the Group holds these events as necessary, usually in conjunction with its consultancy business.

Consultancy to businesses applying for Halal certification

On 3 January 2014, the Group entered into an agreement with JCP Professional Services Sdn Bhd, a Halal compliance consultancy business. The purpose of this agreement was to provide Halal Applicants with consultancy services to assist them with their Halal certificate application.

Strategy and objectives

The Group's overall objective is to promote Halal trade by facilitating and simplifying Halal business transactions anywhere and anytime. The Group's long-term goal is to become the world's digital Halal marketplace, delivering a single platform and a focal centre for the global Halal industry.

The Group's growth strategy consists of the following activities:

   1)   Grow the Group's ecosystem in existing core markets 

The Group currently operates within Malaysia and Southern Asia, which are Muslim dominated regions. The Directors believe that there is a significant opportunity to further grow the number of buyers and sellers benefiting from DagangHalal.com's businesses in these regions. To achieve this growth, the Group intends to hire additional sales and marketing professionals in the region who will be focused on increasing awareness and driving demand.

   2)   Expand the Group's activities into new geographies 

The Directors believe that the Group's offerings are well positioned to benefit buyers and sellers of Halal produce in geographies where the Group does not currently operate, identifying a growing demand for Halal verification and Halal verified products. Key regions to be targeting include Indonesia, China and Japan.

   3)   Increase the number of Halal CB partners 

The Group currently has 37 out of over 120 CBs using the HVE database. By increasing the number of CBs using HVE, the Group's serviceable addressable market increases. The Directors believe that HVE is the only global online Halal verification repository that is able to underpin the verification of Halal products.

   4)   Further develop the Group's platform, products and proprietary technology 

The Group is currently well positioned to grow and benefit from increasing adoption of its products and services. The Directors see great opportunity to further help buyers to look for genuine Halal suppliers, with optimised technology, additional web content and a greater scope of services for Halal merchants. This includes, but is not limited to further development of the DagangHalal.com payment platform, mobile solution and HCMS software extension.

Details of Directors

Chong Khek Ah (Francis), Managing Director

Francis has more than 20 years of experience in operations and managing of businesses, ranging from property, publishing and information and communications technology. He also has substantial business exposure in countries such as United States, United Kingdom, Australia, Kenya and China in various industries ranging from printing, travel and tours, hotel management and property.

Upon completing his secondary school education, he joined his family's property business. In 1989, he joined the publishing industry and was responsible for signing the first Japanese copyright for Doraemon cartoons in Malaysia. He then became a Director of Guang Ming in 1992. Francis founded the WEBSE Group in 1999. In December 2007, he founded DagangAsia Net Sdn Bhd as a subsidiary of WEBSE Group to manage and operate the ecommerce and portal services of DagangHalal.com.

Francis graduated from Assumption University, Thailand, with a Bachelor's degree in Marketing Management.

Mohamed Hazli Mohamed Hussain (Hazli), Chief Executive Officer

Hazli joined DagangHalal.com as Chief Executive Officer in 2013. He started his career in the United States after he graduated from the University of Michigan in 1989 with a Bachelor of Science in Electrical Engineering. Two years later, he returned to Malaysia and worked with various IT companies. Amongst the notable ones was Electronic Data Interchange (Malaysia) Sdn Bhd, where he led a team of 23 engineers to manage the National Trade Network infrastructure, communications equipment and IT infrastructure at the Port Klang Community System and Subang International Airport.

In 2000, he joined IslamiQ.com Asia Sdn Bhd as the Vice President of Technology where he was instrumental in the creation and development of the company's two financial portals IslamiQ.com and IslamiQfinance.com. IslamiQ.finance.com is the first portal in the world that has empowered Muslims to make decisions to invest in permissible stocks from 8000 counters in New York Stock Exchange, American Stock Exchange, Nasdaq and London Stock Exchange.

In 2003, Hazli founded Aegis Infotek Sdn Bhd and was the firm's CEO from 2003 to 2009. Hazli also sat on various advisory boards during his career such as on Multimedia Development Corporation ""Pre-seed Fund Approval Committee, Cradle Fund Sdn Bhd Preseed Fund Approval Committee and Ministry of Science, Technology & Innovation Fund Approval Committee.

Muhadzir Mohd Isa (Muhadzir), Non-Executive Chairman

Muhadzir is Chairman and co-founder of the Group. Muhadzir was a lecturer at the National Institute of Public Administration between 1990 and 1995, and Secretary for the United Malays National Organisation ""Merbok Division from 1990 to 1998. He served as Divisional Secretary to Tun Daim Zainuddin ""when the latter was the Finance Minister of Malaysia.

Muhadzir was the Secretary to the Secretariat of Strategic Development of Education, Transport, Public Works and Infrastructure for the state of Kedah from 2014. He is presently the Local Councillor for the Municipality of Sungai Petani, Kedah; and also Justice of Peace.

John Croft, Independent Non-Executive Deputy Chairman

John is an experienced Director of AIM quoted companies, and has previously worked in executive as well as non-executive capacities with a number of fast growth companies in the technology and financial services sectors. He is the Non-Executive Chairman of AIM listed Fusionex International Plc, AIM listed Adamas Finance Asia Limited and Non-Executive Chairman of Goal Group Limited; a privately owned company in the fintech sector.

John is a former Chairman of e-pay Asia Limited, and previously held Director-level positions at Racal Electronics and NCR Corporation following an early career in Banking with HSBC and Grindlays Bank.

Kashif Aslam, Non-Executive Director

Kashif is an experienced corporate finance executive with over 13 years of investment banking experience attained at Citigroup, Blackstone and the in-house group corporate finance department of Anglo American Plc. Based in the UK, Kashif has worked on a range of M&A, joint venture, debt and equity transactions across a number of sectors and geographies.

Kashif graduated from University College London with BSc Hons in Mathematics with Economics and from INSEAD where he attained an MBA and was a Henry Grunfeld Scholar. In recent years Kashif has participated on the management committee of the INSEAD UK Alumni Association and is an active angel investor in early stage businesses.

Ng Chee Chau (Charles), Non-Executive Director

Charles graduated from the University of Aberdeen, United Kingdom with B.Eng. (Hons) in Electronic Engineering in 1992. Since then, he has had more than 20 years of experience in operations and the managing of businesses in telecommunications, ICT and payment processing. He has also managed a number of companies across South East Asia and the Middle East.

Sector classification

DagangHalal will be classified as a Software & Computer Services company on ISDX.

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DJ DagangHalal PLC First Day of Dealings on ISDX -3-

Significant shareholder information

 
 Shareholder                            Number   % shareholding 
                                     of shares 
 Harmony Link International Ltd     10,065,158            17.2% 
 Bull Wealth Ltd                     9,301,266            15.9% 
 MBI International Holdings Ltd      7,416,429            12.7% 
 Wind Air Development Ltd            7,416,429            12.7% 
 Time Assets Holdings Ltd            6,621,811            11.3% 
 Malaysia Technology Development 
  Corporation                        5,339,829             9.1% 
 Total                              43,397,823            78.9% 
 

The percentage of shares not in public hands is 88.7%.

All shares have equal voting rights. There are no restrictions on the transfer of shares.

Further information

The Admission Document is available from the offices of Arden Partners at

125 Old Broad Street, London, EC2N 1AR

The Company's ordinary shares are eligible for CREST settlement

The Company is subject to the UK City Code on Takeovers and Mergers

The Directors of DagangHalal accept responsibility for this announcement

Company contact details

DagangHalal PLC

Wisma UOA II

Suite 10-10, No. 21

Jalan Pinang

50450

Kuala Lumpur

Malaysia

Tel: +60 (0)3 217 11128

www.daganghalalgroup.com

Corporate Adviser contact details

Arden Partners PLC

125 Old Broad Street

London

EC2N1AR

Tel: +44 (0)207 614 5900

End

This information is provided by RNS

The company news service from the London Stock Exchange

END

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