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UNAUDITED HALF-YEAR FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 31 MARCH 2018

Financials Archive

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Consolidated Statement of Profit or Loss

Profit or Loss

Statements of Financial Position

Balance Sheet

Review of the Group's Income Statement

Revenue

The Group typically experiences a fluctuation in revenue contribution from its customers from period to period due to the project-based nature of its business. The Group’s projects differ in their scope and size and are typically non-recurring.

The Group’s revenue for the six-month period ended 31 March 2018 (“1H2018”) was S$9.23 million, a decrease of S$3.38 million or 26.8% as compared to S$12.61 million for the corresponding six-month period ended 31 March 2017 (“1H2017”).

The decrease in revenue of S$3.38 million was mainly due to:

  1. decrease in sale of door and shutter systems of S$1.75 million;
  2. absence of revenue contribution of S$1.98 million from a subsidiary (i.e. Gliderol Doors Asia Limited) that was disposed of by the Company in September 2017; and
  3. decrease in provision of service and maintenance work of S$0.04 million.

The decrease in revenue was partially offset by an increase in revenue from sales of production components of S$0.39 million.

The lower revenue achieved in 1H2018 was mainly attributable to the Group experiencing competitive pricing pressures in the door and shutter system industry

Cost of sales

Cost of sales decreased by S$1.50 million or 20.0% from S$7.48 million in 1H2017 to S$5.98 million in 1H2018 mainly due to lower material costs of S$1.28 million and lower labour cost of S$0.22 million.

Gross profit

Gross profit decreased by S$1.88 million or 36.6% from S$5.13 million in 1H2017 to S$3.25 million in 1H2018. Gross profit margin decreased from 40.7% in 1H2017 to 35.2% in 1H2018. The lower gross profit margin was mainly due to compressed margins arising from the competitive pricing pressures in the door and shutter systems.

Other operating income

Other operating income increased by S$0.06 million or 36.5% from S$0.18 million in 1H2017 to S$0.24 million in 1H2018. The increase in other operating income was mainly attributable to government grant received in 1H2018.

Marketing and distribution expenses

Marketing and distribution expenses increased marginally by S$0.01 million or 3.9% from S$0.33 million in 1H2017 to S$0.35 million in 1H2018.

Administrative expenses

Administrative expenses decreased by S$1.03 million or 27.8% from S$3.70 million in 1H2017 to S$2.67 million in 1H2018. The decrease in administrative expenses was mainly due to (i) lower personnel cost of S$0.79 million as a result of decreased headcount; (ii) lower professional fees of S$0.10 million and (iii) lower rental expenses of $0.10 million partially due to absence of rental expenses from a subsidiary (i.e. Gliderol Doors Asia Limited) that has been disposed of by the Company in September 2017.

Other operating expenses

Other operating expenses decreased by S$0.18 million or 57.1% from S$0.32 million in 1H2017 to S$0.14 million in 1H2018. The decrease in other operating expenses was mainly due to the decrease in impairment loss on trade receivables of S$0.16 million.

Investment revenue

Investment revenue, comprising interest income, decreased slightly by S$1,000 or 14.3% from S$7,000 in 1H2017 to S$6,000 in 1H2018.

Other gains and losses

Other gains and losses reversed from a net gain of S$0.05 million in 1H2017 to a net loss of S$0.13 million in 1H2018 mainly due to the increase in net foreign exchange loss of S$0.19 million arising from the translation of trade receivables and bank balances denominated in US$ in 1H2018.

Finance costs

Finance costs decreased by S$6,000 or 85.7% from S$7,000 in 1H2017 to S$1,000 in 1H2018 mainly due to absence of finance cost from a subsidiary (i.e. Gliderol Doors Asia Limited) that has been disposed of by the Company in September 2017.

Income tax credit

The Group is in an income tax credit position where it increased by S$0.29 million from S$0.05 million in 1H2017 to S$0.34 million in 1H2018. The increase in income tax credit was mainly due to a net tax refund of S$0.14 million received and reversal of over provision of tax in prior years of S$0.15 million.

Profit for the year

As a result of the above, profit for the year decreased by S$0.51 million or 47.7% from S$1.06 million in 1H2017 to S$0.55 million in 1H2018.

Review of the Group's Financial Position

Current assets

Current assets decreased by S$0.93 million from S$19.22 million as at 30 September 2017 to S$18.29 million as at 31 March 2018. The decrease in current assets was mainly due to a decrease in trade and other receivables of S$1.88 million, partially offset by an increase in cash and cash equivalents of S$0.74 million. Trade and other receivables were lower as a result of (i) a decrease in trade receivables of S$1.63 million; (ii) a decrease in prepayments of S$0.20 million; and (iii) a decrease in deposits and advance to supplier of S$0.05 million.

Non-current assets

Non-current assets decreased by S$0.34 million from S$6.69 million as at 30 September 2017 to S$6.35 million as at 31 March 2018. The decrease in non-current assets was mainly attributable to lower net book value in property, plant and equipment and intangible assets arising from depreciation and amortization charges.

Current liabilities

Current liabilities decreased by S$1.14 million from S$3.09 million as at 30 September 2017 to S$1.95 million as at 31 March 2018. The decrease in current liabilities was mainly due to:

  1. a decrease in trade and other payables of S$1.07 million; and
  2. a decrease in income tax payable of S$0.04 million.

Non-current liabilities

Non-current liabilities increased by S$0.13 million from S$0.70 million as at 30 September 2017 to S$0.83 million as at 31 March 2018. The increase in non-current liabilities was due to an increase in other payables of S$0.29 million which are deferred income on government grant received, partially offset by the decrease in deferred tax liabilities of S$0.16 million.

Capital, reserves and non-controlling interests

Total equity decreased from by S$0.26 million from S$22.12 million as at 30 September 2017 to S$21.86 million as at 31 March 2018.

Review of the Group's Cash Flows

Net cash from operating activities

In 1H2018, the Group generated net cash of S$0.71 million from operating activities before changes in working capital. The Group’s net working capital inflow amounted to S$0.93 million and was mainly due to the decrease in trade and other receivables of S$1.87 million, partially offset by increase in inventories of S$0.21 million and decrease in trade and other payables of S$0.73 million. After net income tax refund of S$0.14 million, the net cash from operating activities in 1H2018 amounted to S$1.79 million.

Net cash used in investing activities

Net cash used in investing activities amounted to S$0.09 million, mainly due to purchase of property, plant and equipment of S$0.10 million.

Net cash used in financing activities

Net cash used in financing activities amounted to S$0.90 million, mainly due to payment of dividends of S$0.85 million and repayment of finance lease obligation of S$0.04 million.

Commentary

With the continued uncertain economic outlook, the Group expects the door and shutter solutions industry in Singapore to remain challenging. The Group will continue to take a cautious and prudent approach in bidding for new projects.

The Group continues to be on the lookout for new projects, both locally and overseas in order to maintain or expand its order book. With completion of the automation of production processes in 2017, the Group is equipped to execute higher export orders.