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Income
Statement
For FY06, the Group’s turnover was up 2.5% to $53.1m compared to the previous corresponding year FY05. In line with increase in sales, the gross profit also increased by 5.0%. The improvement in gross profit margin of FY06 63.9% from FY05 62.3% was attributed to the higher rental income earned in FY06 of $3.4m as compared to FY05 of $1.5m. The group’s profit after tax improved from $26,000 in FY05 to $550,000 in FY06. This was mainly due to better control over costs for the group.
On a segmental basis, the Group’s Institutional Catering division grew by $1.4m or 6.9% to $21.0m in terms of sales. The growth came from the Suzhou market offset by a minor decrease in Singapore market. The increased sales reduced the loss suffered in Suzhou market.
The Group’s Food Retail division gave up on non-performing outlets resulting in sales decline of
$3.1m or 15.7% to $16.9m. There is a focus to increase exposure to Lerk Thai restaurant business and the group added an outlet in Whitesand Mall in FY06. In Jan FY07, the group added another outlet in the new Square2 shopping mall. Including the existing 3 outlets in Bugis Village, Singapore Expo and Marina Square, the total number of Lerk Thai restaurants is 5 as at Feb FY07. The Group operated a total of 32 food retail establishments (including 2 foodcourts) as at 31 December 2006.
The Group’s Food Catering division grew by $1.5m or 14.4% to $11.7m, with sales out of both
Senoko central kitchen and Flavours East in Singapore Expo contributing to the growth. Besides
generating food and beverage catering sales, Singapore Expo also houses restaurant tenants and generates rental income.
Balance
Sheet
Current assets decreased by $0.2 million or 1.4% mainly due to the dividends paid in May 2006 offset by increase in receivables.
The decrease in value of property, plant and equipment resulted mainly from the annual depreciation offset by purchase of plant and machinery in the ordinary course of business.
Current liabilities decreased by $0.9 million due to decrease in funding from trade payables offset by higher short-term working capital financing.
Non-current liabilities decreased as the Group made payments to reduce the loan outstanding. As at end of FY06, the Group maintained a healthy net gearing at 0.27.
Reserves increased marginally by $0.1m to $7.2m due to current year profit offset by the dividend paid in May 2006.
Cash Flow
Net cash from operating activities maintained at $0.8m for both FY06 and FY05. The cash flow is
attributed to the following:
a) Higher operating profit which increased the operating cash inflow offset by
b) Lower short-term funding from receivables and payables
The Group invested a total of $0.6m for purchase of plant and equipment mainly for new retail outlets and motor vehicles purchased during the year.
In terms of financing activities, cash was used to reduce borrowings and to make dividend payout of $371,000 in May 2006.
The Group recorded a net cash outflow of $1.4m for FY06 due to the above-mentioned reasons.
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