Resource sees sales slide

The sales collapse was blamed on a slide in western product advertising in Malaysia and China -earnings held up better because of a successful switch to higher-margin internet advertising. Indeed, the gross margin increased to 43.7 per cent from 31.3 per cent. Progress has also been slow in linking up with a large Chinese conglomerate to extend the group's advertising in China and the need to make deferred consideration payments on an advertising deal is another problem. A deferred consideration payment of RM5.28m (£1.1m) in the period almost absorbed operating cash flow of RM6.17m - much the same happened last year, too. Meanwhile, a £20m equity facility signed with Dutchess Opportunity Cayman Fund in May has been put on hold because of the low share price.

However, group managing director and 23 per cent shareholder Cheong Chia Chieh sounds confident that full-year pre-tax profit will exceed end-2011's RM10.4m.