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Full Year Financial Statement And Related Announcement 2016

Financials Archive

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Unaudited Full Year Financial Statements and Dividend Announcement for the Year Ended 31 December 2016

Consolidated Statement of Comprehensive Income

csci

Balance Sheet

bs

Review of Performance

Review of Income Statement

Revenue

The breakdown of revenue by business segments is shown in the table below.

breakdown

Group revenue for the year ended 31st December 2016 closed at S$424.0 million or 2.1% lower than prior year due mainly to the loss of revenue resulting from the closure of non-performing outlets and restaurant business from the Food Retail Division and offset partially by growth registered by the Food Division. For the year :

  1. Wholesale & distribution achieved higher revenue contributed by both Singapore and Malaysia markets. In local currency, Malaysia revenue grew by 1.9% for FY2016;

  2. Manufacturing continued its growth momentum. During the last quarter, the business updated and strengthened its product and brand identity with new and more exciting packaging;

  3. Edmontor recorded lower revenue as a result of the closure of non-performing outlets in Singapore, Malaysia and Hong Kong last year. During the year, Singapore and Hong Kong were impacted by further closure of 9 non-performing outlets. Overall sales in Hong Kong was hit by the weak retail and economic outlook which impacted customers’ spending sentiment; and

  4. Food Junction returned lower revenue caused mainly by the closure of non-performing food courts and restaurants business in China in 2015 and further closure of 2 food courts and the 2 remaining non-performing restaurants in Singapore in 2016.

Profit before taxation

The Group reported profit before taxation (PBT) of S$11.9 million in FY2016 as opposed to a loss before taxation of S$45.0 million last year. The upswing in profitability in FY2016 was primarily attributable to the Group rationalization exercise to streamline its non-performing businesses and investments in FY2015. For the year :

  1. Wholesale and distribution registered higher operating profit in FY2016, contributed mainly by Malaysia which benefited from higher sales from house brands products while the profitability of Singapore was hindered by higher operating expenses;

  2. Manufacturing closed the year with almost flat operating profit against last year due to higher marketing expenses;

  3. Edmontor lowered its operating loss in FY2016 driven by the continuing efforts undertaken by Singapore and Hong Kong in rationalizing the operations to achieve operational and cost efficiency and the absence of operating loss from Delifrance Malaysia. The operating results for the year included an impairment loss of S$2.7 million for the Delifrance factory; and

  4. Food Junction turnaround its performance from a loss last year to a profit in FY2016 benefiting from improved performance from food courts and self-operated stalls in Singapore and rationalisation of operating costs including the closure of under-performing restaurants in 2015 and 2016. Performance in 4th quarter included an impairment charge of $2.0 million for part of the intangible assets following a shift in strategic focus by the business.


Review of Financial Position

As at 31 December 2016, the Group’s total equity stood at S$168.5 million or S$7.6 million higher than prior year. The increase was contributed largely from the profit posted for the year.

There are no other significant changes to the Statement of Financial Position except for the following:

  1. lower property, plant and equipment due primarily to depreciation, disposal, allowance for impairment and write-off of assets, offset by the purchase of new assets;

  2. lower long-term investment due mainly to allowance for impairment on unquoted investment funds;

  3. higher stocks due to stocks built-up for upcoming Chinese New Year festival;

  4. lower trade debtors attributed to improved collection from customers;

  5. lower other debtors and other recoverable due to reduction on tax recoverable and refundable deposits received from the closure of restaurants and outlets;

  6. higher trade creditors due mainly to increase in purchases in line with the stock build up; and

  7. higher other creditors and accruals due mainly to accrual for advertising and promotion and higher provision for operating expenses.


Cash Flow Review

The Group cash and cash equivalents increased by S$43.6 million from S$44.5 million as at 31 December 2015 to S$88.1 million as at 31 December 2016. The net cash increase was largely generated from operating activities, offset by capital expenditure and repayment of bank borrowings.

Commentary on Current Year Prospects

Our drive for business growth and rationalization have yielded results with a stronger landing in FY2016. However, in view of the challenges and uncertainties in the year ahead, our Group will continue to focus building stronger foundation for our core businesses and to seek new avenues and opportunities for business growth.