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Full Year Financial Statement And Dividend Announcement For The Period Ended 31 March 2017

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Income Statement

Profit and Loss 4Q2016


Statement of Comprehensive Income

comprehensive-income


Balance Sheets

Balance Sheet 4Q2016

Review of Performance

Unaudited Financial Statements for the Year Ended 31 March 2017

The group recorded revenue of S$304.5 million, gross profit of S$85.9 million and loss from operations of S$37.6 million, as compared to FY2016, which recorded revenue, gross profit and loss from operations amounting to S$346.5 million, S$87.1 million and S$30.1 million respectively. These represent a 12.1% decrease in revenue and 1.4% decrease in gross profit.

Lower revenue and gross profit (a decrease of S$42.0 million and S$1.2 million respectively) was mainly attributed to weaker sales generated by overseas subsidiaries as a result of lower customers' spending due to weakened global economic conditions.

Despite the drop in revenue and gross profit, the Group's gross profit margin has improved from 25.1% to 28.2%. This is due to focus on better margin products and product mix.

Loss from operations increased by S$7.5 million in FY2017. This was mainly due to increase in other operating expenses such as revaluation deficit in properties and fixed assets, loss disposal of fixed assets, utilities and a write back of provision of Scheme and Scheme-related expenses in previous year.

The Group reported loss for the year of S$71.9 million in FY2017 mainly due to:

financials

Excluding the effects of these items, the Group would have recorded a net loss of S$13.0 million for FY2017.

Commentary

The Group's operating environment remains challenging against a backdrop of a weak retail industry and volatile exchange rates in our major markets, increasing margin pressures, rising costs across geographical regions, as well as manpower tightening policies in Singapore.

The Group had launched its new "shop-in-shop" concept by introducing Japanese Supermart brands "Gyomu Super" inside its BIG BOX Hypermart, and the niche display of products by country of origin. The Group will continue to focus on building up its retail business, strengthen BIG BOX operations to increase its market share and the expansion of its Indonesian operations. These will contribute to the Group's financial performance in the long run.

The Company is being restructured under the Scheme of Arrangement (the "Scheme") sanctioned by the Court of Appeal in Singapore on 13 October 2010. The effective date of the Scheme is 19 April 2010.

The ability of the Group and the Company to continue in operation in the foreseeable future and to meet their financial obligations (both short term and long term) as and when they fall due is dependent on:

  1. the successful implementation of the Scheme;
  2. the profitability of future operations of the Company and its subsidiaries;
  3. the controlling shareholders and key management personnel of the Company remaining substantially unchanged;
  4. the ability to secure financing support as and when required: and
  5. the continuing support of bank and other creditors, suppliers and other parties.

In light of the weak retail industry, the Company has taken steps to review its options to restructure its Big Box operations and balance sheet. The Company has been in discussions with its counterparties to address the debt maturities and financial obligations in connection with the Big Box operations and the Group has been in discussions with arrangers and financial institutions to secure funding to refinance a term loan secured by Big Box property and other liabilities of the Group ("Refinancing Exercise"), including S$70 million of the Settlement Sum required to discharge the Scheme in full as approved by the Scheme Creditors on 18 April 2017. The Big Box property is 51% owned by the Group and the restructuring of the Big Box operations and balance sheet is subject to agreement by all shareholders of the subsidiary, Big Box Pte Ltd.

Subject to the successful completion of the restructuring of the Big Box operations and balance sheet, including the Refinancing Exercise, and the discharge of the Scheme, the Board is of the view that the Group will be able to meet its short-term obligations as and when they fall due despite the negative working capital position as the Company continues exploring various possibilities in securing the necessary funding to provide the Group with additional working capital.