Review of Financial Performance
For the year ended 31 December 2016 (“FY2016”), the Group recorded revenue amounting to S$26.2 million, an increase of 0.8% or approximately S$0.2 million, as compared to the previous year in review (“FY2015”). The increase was led by both of our business segments – Fabrication and Distribution; and Maintenance and Servicing.
Cost of sales and gross profit
The Group’s cost of sales decreased marginally by approximately S$0.1 million from S$17.4 million in FY2015 to S$17.3 million in FY2016, caused by the decrease of the Group’s cost of materials and partially offset by the increase in staff related costs due to expansion of the service and maintenance and project installer teams.
Gross profit for the year improved by S$0.2 million to S$8.8 million as compared to S$8.6 million in FY2015. Gross profit margin also inched up to 33.6% from 33.1% in FY2015.
Other income rose by approximately S$0.1 million from S$0.6 million to S$0.7 million for the year in review. This increase was mainly brought about by the increase amounting a total of S$0.3 million from (i) government grants, (ii) bad debts recovered, offset by the one-off gains on disposal of property in FY2015 of S$0.2 million.
With the increase in staff costs and trade fairs, distribution costs in FY2016 increased by S$0.3 to S$2.5 million, compared to S$2.2 million in FY2015.
Administrative expenses decreased this year by approximately S$0.7 million (14%) as compared to the previous corresponding year, mainly due to decreases in (i) staff costs; (ii) directors remuneration; (iii) legal and professional fee; (iv) staff welfare and training, partially offset by increases in other office administrative expenses.
Decreases in amortisation cost and allowance for doubtful debts lowered other expenses by S$0.4 million to approximately S$0.1 million in FY2016 (FY2015: S$0.5 million).
Finance costs remained flat at S$0.1 million in FY2016 compared to FY2015.
Income tax expense
Income tax expense for the year was S$0.6 million, offset by income tax refund for the previous year of assessment amounting to S$0.3 million.
Profit for the year
For FY2016, the Group report a higher net profit attributable to equity shareholders of approximately S$2.6 million compared to S$1.5 million for FY2015. This improvement stemmed from the decreases in administrative and other expenses and tax refund from previous year of assessment.
Statement of Financial Position and Cash Flows
The Group’s non-current assets decreased by S$0.3 million to S$1.4 million as at 31 December 2016 (31 December 2015: S$1.7 million). The Group incurred depreciation and amortisation charges for the year, offset by an increase of acquisition of plant and equipment and intangible assets (computer software).
The reported current assets of the Group amounted to approximately S$21.1 million as at 31 December 2016 (31 December 2015: S$19.4 million). The increase in cash and cash equivalents was mainly attributed to the increased cash generated from operating cash flow coupled with the decrease in net cash used in financing activities, as a result of the reduced bank borrowing repayment.