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UNAUDITED CONDENSED INTERIM FINANCIAL STATEMENTS FOR THE SIX MONTHS AND FULL YEAR ENDED 30 JUNE 2024

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CONDENSED INTERIM CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

CONDENSED INTERIM STATEMENTS OF FINANCIAL POSITION

Review of Performance of the Group

(a) Others included revenue from home retrofitting business, landscaping works, interior design, leasing, mechanical & electrical engineering works, renewable solutions works, vector control services and handyman services.

Condensed Interim Consolidated Statement of Comprehensive income

Revenue

2HY2024 vs 2HY2023

The Group’s revenue increased by $10.9 million or 19.3% from $56.5 million in 2HY2023 to $67.4 million in 2HY2024. Revenue increase was mainly due to higher revenue generated by the core business segments (R&R, A&A and C&P) , partially offset by the decrease in revenue from the Others business segment as a result of disposal of a subsidiary.

FY2024 vs FY2023

The Group's revenue increased by $19.8 million or 17.9% from $110.4 million in FY2023 to $130.2 million in FY2024. Revenue increase was mainly due to higher revenue generated by the core business segments, partially offset by the decrease in revenue from the Others business segment as a result of disposal of subsidiary(ies) in FY2024 and FY2023 respectively.

Gross profit and gross profit margin

2HY2024 vs 2HY2023 and FY2024 vs FY2023

The Group's gross profit increased by $5.8 million from $6.1 million in 2HY2023 to $11.9 million in 2HY2024 and increased by $9.1 million from $11.1 million in FY2023 to $20.2 million in FY2024 mainly due to improved margins.

Other income

2HY2024 vs 2HY2023 and FY2024 vs FY2023

The Group's other income increased by $3.7 million from $1.4 million in 2HY2023 to $5.1 million in 2HY2024 and increased by $1.1 million from $4.6 million in FY2023 to $5.7 million in FY2024. The higher other income in FY2024 was mainly due to one-off gain on disposal of a subsidiary and fair value gain on other investments.

Marketing and distribution expenses

2HY2024 vs 2HY2023 and FY2024 vs FY2023

There were no material changes in the Group's marketing and distribution expenses for the financial period. The Group’s marketing and distribution expenses decreased by $0.1 million or 10.0% from $0.8 million in FY2023 to $0.7 million in FY2024. The decrease was mainly due to reduction in staff cost as a result of the disposal of a subsidiary.

General and administrative expenses

2HY2024 vs 2HY2023 and FY2024 vs FY2023

The Group's general and administrative expenses increased by $2.0 million or 36.3% from $5.5 million in 2HY2023 to $7.5 million in 2HY2024 and increased by $1.9 million or 16.8% from $11.3 million in FY2023 to $13.2 million in FY2024. The increase was mainly attributable to the increase in staff salaries & bonuses and professional fees.

Finance costs

2HY2024 vs 2HY2023 and FY2024 vs FY2023

There were no material changes in the Group's finance costs for the financial period. The Group's finance costs increased by $0.2 million or 8.6% from $2.3 million in FY2023 to $2.5 million in FY2024. This was mainly due to higher utilisation of trade facilities and higher interest incurred on bank borrowings.

Impairment loss on receivables and contract assets

2HY2024 vs 2HY2023 and FY2024 vs FY2023

The Group's impairment loss on receivables and contract assets increased by $1.4 million from $0.2 million in 2HY2023 to $1.6 million in 2HY2024 and increased by $1.1 million from $0.6 million in FY2023 to $1.7 million in FY2024. This was due to the increase in credit risk and changes in market conditions that has affected the value of contract assets and receivables.

Other operating expenses

2HY2024 vs 2HY2023 and FY2024 vs FY2023

The Group's other operating expenses increased by $0.1 million from $0.1 million in 2HY2023 to $0.2 million in 2HY2024 and increased by $0.3 million from $0.2 million in FY2023 to $0.5 million in FY2024. The increase was mainly due to equity-settled share-based compensation.

Profit before tax

2HY2024 vs 2HY2023 and FY2024 vs FY2023

As a result of the above, the Group recorded a profit before tax of $6.0 million in 2HY2024 compared to a loss before tax of $0.1 million in 2HY2023 and a profit before tax of $7.3 million in FY2024 compared to a profit before tax of $0.5 million in FY2023.

Tax (expense)/credit

2HY2024 vs 2HY2023 and FY2024 vs FY2023

The Group recorded a tax credit of $0.4 million in 2HY2023 compared to tax expense of $0.7 million in 2HY2024 due to provision of tax expense and tax credit of $0.7 million in FY2023 compared to tax expense of $0.7 million in FY2024 due to recognition of income tax expense.

Condensed Interim Statements of Financial Position

Non-current assets

The Group's non-current assets decreased by $0.7 million from $28.0 million as at 30 June 2023 to $27.3 million as at 30 June 2024, mainly due to decrease in property, plant and equipment offset by the increase in other Investments.

Current assets

The increase in current assets of $8.0 million or 10.9% from $73.0 million as at 30 June 2023 to $81.0 million as at 30 June 2024 was mainly due to an increase in contract assets and cash and bank balances offset by the decrease in trade and other receivables.

Non-current liabilities

The decrease in non-current liabilities of $4.2 million or 24.6% from $17.0 million as at 30 June 2023 to $12.8 million as at 30 June 2024 was mainly due to repayment of loans and borrowings and lease liabilities.

Current liabilities

The decrease in current liabilities of $5.7 million or 9.8% from $58.4 million as at 30 June 2023 to $52.7 million as at 30 June 2024 was mainly due to the repayment of loans and borrowings.

Condensed Interim Consolidated Statement of Cash Flows

Net cash used in operating activities

FY2024

Net cash generated from operating activities amounted to $6.2 million in FY2024 was mainly due to decrease in trade and other payables as a result of the disposal of a subsidiary which were offset by the increase in contract assets and trade and other receivables.

Net cash used in investing activities

FY2024

Net cash used in investing activities amounted to $0.9 million was mainly due to the purchases of property, plant and equipment.

Net cash used in financing activities

FY2024

Net cash generated from financing activities of $0.5 million in FY2024 was mainly due to drawn down of borrowings and proceeds from issuance of shares by way of rights issue which were offset by repayment of borrowings, interest paid and repayment of lease liabilities.

Commentary

According to the Ministry of Trade and Industry Singapore (“MTI”) advanced estimates released on 13 August 2024^#, Singapore’s construction sector grew by 3.8 per cent year-on-year, extending the 4.1 per cent growth in the first quarter. Growth during the quarter was supported by the increase in both public and private sector construction output. On a quarter-on-quarter seasonally-adjusted basis, the sector grew by 1.8 per cent, a turnaround from the 1.9 per cent contraction in the preceding quarter.

As at 30 June 2024, the order book of the Group stands at $193.1 million, which should support the Group’s activities to FY2027. The Group will selectively tender for public and private sector projects, taking into consideration the prevailing market conditions including rising manpower and material costs. Accordingly, the Group continues to prioritise cash conservation and cost control.

^# MTI Narrows 2024 GDP Growth Forecast to “2.0 to 3.0 Per Cent” (mti.gov.sg)