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UNAUDITED FINANCIAL STATEMENTS AND DIVIDEND ANNOUNCEMENT FOR THE FIRST QUARTER ENDED 30 SEPTEMBER 2018

Financials Archive

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Consolidated Statement of Comprehensive Income

Combined Statements of Comprehensive Income

Statements of Financial Position

Combined Statements of Financial Statements

Review of Financial Performance

Review of Financial Performance

Revenue

Group revenue increased by $2.2 million or 8.6% from $25.1 million in 1QFY2018 to $27.3 million in 1QFY2019.

The increase was mainly due to increase revenue of A&A and Others business segments, it was mainly offset by decrease in revenue of R&R business segment.

Gross profit and gross profit margin

The Group's gross profit increased by $0.5 million or 9.9% from $4.4 million in 1QFY2018 to $4.9 million in 1QFY2019. There were no material changes in gross profit margin during the financial period under review.

Other income

The Group's other income decreased by $0.3 million or 61.7% from $0.5 million in 1QFY2018 to $0.2 million in 1QFY2019. The decrease was mainly due to lesser government grant applicable to the Group.

General and administrative expenses

The Group's general and administrative expenses increased by $1.0 million or 38.8% from $2.7 million in 1QFY2018 to $3.7 million in 1QFY2019. The increase was mainly attributable to the increase in depreciation of property and renovation of the new office building and the absence of a one-off write back of allowance for doubtful debt due to undertaking by the vendor of an acquired subsidiary in 1QFY2019.

Finance costs

The Group's finance costs increased by $0.1 million or 44.5% from $0.1 million in 1QFY2018 to $0.2 million in 1QFY2019, mainly due to increase in borrowings to finance the purchase of office building.

Profit before tax

As a result of the above, the Group recorded a profit before tax of $0.6 million in 1QFY2019 as compared to $1.6 million in 1QFY2018.

REVIEW OF FINANCIAL POSITION

Non-current assets

The Group's non-current assets decreased by $2.5 million or 5.5% from $45.9 million as at 30 June 2018 to $43.4 million as at 30 September 2018, mainly due to reclassification of certain properties from property, plant and equipment ("PPE") to asset held for sales and investment property, depreciation of PPE and investment property, disposal of PPE and amortisation of intangible assets, which were offset by the purchase of PPE.

Current assets

The increase in current assets of $12.8 million or 20.1% from $64.0 million as at 30 June 2018 to $76.8 million as at 30 September 2018 was mainly due to increase in contract assets, asset held for sale and trade and other receivables, which were offset by decrease in cash and bank balances.

The significant increase in trade and other receivables of approximately $10.0 million was due to billings for a major project which has been subsequently collected in full as of the date of this announcement.

Non-current liabilities

The decrease in non-current liabilities of $0.5 million or 3.0% from $15.7 million as at 30 June 2018 to $15.2 million as at 30 September 2018 was mainly due to the repayment of bank borrowings and decrease in deferred tax liabilities, which were offset by increase in finance lease liabilities for purchase of additional PPE.

Current liabilities

The increase in current liabilities of $10.9 million or 33.4% from $32.6 million as at 30 June 2018 to $43.5 million as at 30 September 2018 was mainly due to the increase in contract liabilities, tax payables, bank borrowings and trade and other payables.

REVIEW OF STATEMENT OF CASH FLOWS

Net cash used in operating activities

Net cash used in operating activities amounted to $2.6 million was mainly due to increase in contract assets/liabilities and trade and other receivables which were offset by increase in trade and other payables.

Please refer to the explanation under current assets for further details on trade and other receivables.

Net cash used in investing activities

Net cash used in investing activities amounted to $0.7 million was mainly due to the purchase of PPE.

Net cash generated from financing activities

Net cash generated from financing activities of $1.9 million was mainly due to drawdown of bank borrowings which were offset by purchase of treasury shares, repayment of bank borrowings and finance lease.

Commentary

Despite the challenging operating environment, the Group’s order book as at 31 Oct 2018 remained strong at $121.0 million, and which is expected to be delivered over the next two years. The Group expects revenue to be mainly driven by its A&A segment which currently includes two major projects for a leading resort in Singapore.

The Group is at the forefront of constructing floating solar installations in Singapore and it is working very closely with Sunseap Group which is its strategic partner in this sector. The Group expects to see additional new revenue stream from this collaboration.

Although the market conditions remain challenging, the Group is actively reviewing its project management processes to boost manpower productivity and efficiencies and is also implementing a number of management actions such as tighter control measures, collection policies and processes to improve its working capital cycle.

With its action plan and barring unforeseen circumstances, the Group is cautiously positive of its outlook for FY2019.