Business Reviews
(Extracted from Annual Report 2011)
Overview of financial results for the year ended 31 March 2011
Group revenue decreased S$113.5 million from S$539.9 million in the corresponding previous financial year to S$426.4 million for the year under review. The decrease in revenue was mainly due to the voluntary suspension or hibernation of our longer cash conversion cycle business segment in Poland, and political unrest in Middle East. The decline was mitigated by our strategy to redeploy our limited resources to our shorter cash conversion cycle business segment (supply chain management businesses) and the more profitable distribution activities within the Asean and Oceania region.
The Group suffered a loss of S$37.1 million for the full year ended 31 March 2011, as compared with a loss of S$0.7 million (restated) achieved in the previous financial year (The financial statements for the year ended 31 March 2010 was restated as explained under Note 29 to the financial statements). The higher losses were mainly attributable to the exchange difference between the current financial year under review (recorded an exchange loss of S$4.4 million) as compared to the corresponding previous financial year (recorded an exchange gain of S$36.1 million). If exchange differences were excluded, loss for the financial year ended 31 March 2011 would be S$32.7 million, improving by S$4.1 million over the previous corresponding financial year's loss of S$36.8 million. This improvement was mainly attributed to reduction in operating expenses and a one-off gain arising from the Scheme Adjustments.
Performance by Geographical Segments
As a consequence of the prolonged process of sanctioning the scheme and in line with the severe working capital shortfall, the business turnover for the year under review generally decreased across all geographical regions.
ASEAN region contributed a lower turnover of S$262.3 million during the year under review, as compared to S$277.5 million for the corresponding previous financial year, a decrease of S$15.2 million; Turnover for East Asia and other countries decreased by S$1.0 million from S$97.9 million for the corresponding previous financial year to S$96.9 million for the year under review; Turnover for Africa and Middle East decreased by S$31.4 million from S$58.3 million for the corresponding previous financial year to S$26.9 million for the year under review; and turnover for C1S, Russia and Eastern Europe decreased by S$65.9 million from S$106.1 million for the corresponding previous financial year to S$40.2 million for the year under review.
Review of Strategic Business Units
Retail, Distribution and Trading
Our retail and distribution, and trading business segments continued to contribute significantly to the Group revenue, contributing S$424.5 million or 98.4% of the total revenue, as compared to S$533.5 million or 97.0% of total revenue from the previous corresponding financial year. The decrease of S$109.0 million was mainty due to the severe shortfalls in working capitat due to the consequentiat repercussions arising from the prolonged process of sanctioning the scheme.
Revenue from our core consumer electronics product amounted to S$385.0 million as compared with S$484.7 million of the previous corresponding financial year. Of this, our AKIRA and private label business contributed S$172.3 million as compared with S$206.6 million of the previous corresponding financial year.
Warehousing and logistics
Revenue for the warehousing and logistics segment reduced by S$9.8 million from S$13.2 million in the corresponding previous financial year to S$3.4 million, mainly attributed to the full year effect of the return of the TT International Tradepark to Ascendas REIT during the fourth Quarter of the previous financial year.
Business Strategies
Going forward the Group intends to leverage on its core strengths in sourcing, trading and distribution network to expand and grow its regional and global retail franchise. Given the working capital constraints, the Group will focus on businesses which requires less working capital, yet able to yield higher profit margin and faster cash flow generation. Our activities will involve expanding our retail coverage of selected regional countries and further strengthening of our house brand AKIRA. More emphasis and attention will be placed on product design, innovation and quality.
An integral component of our retail strategy in Singapore will be the commencement of the Big Box project which upon completion will house many of our product offerings and serve as regional training Headquarter. Negotiations with potential investors for the Big Box project are still ongoing.