Unaudited Financial Statements and Dividend Announcement For the Six Months and Full Year ended 30 June 2022
Profit or Loss
Review of Performance
A. Consolidated Statement of Comprehensive Income (Full Year FY2022 vs Full Year FY2021)
Total revenue increased by $2.57 m or 14.4% from $17.88 million in FY2021 to $20.45 million in FY2022. The increase was mainly due to higher revenue from engineering services, and security and manpower services. This was offset by a decrease in revenue from transport services.
Increase in engineering services revenue was due to more contracts being completed in FY2022. Increase in security and manpower services revenue was due to more contracts secured in security services, and increase in number of technicians outsourced to the aviation industry. Transport services continued to be affected by the COVID-19 situation with a low utilisation of buses, which resulted from less adhoc bookings, lower ridership of premium bus services, and cancellation of some contracts.
- Cost of Sales:
Cost of sales increased by $2.70 million or 17.0% from $15.88 million in FY2021 to $18.58 million in FY2022. The increase was mainly due to increase in cost of sales of security and manpower services, corresponding to an increase in revenue. Cost of sales of engineering services and transport services decreased slightly.
- Gross Profit:
Gross profit decreased by $0.13 million or 6.3% from $2.0 million in FY2021 to $1.87 million in FY2022. This was due mainly to increase in gross losses from transport services, mitigated by increase in gross profits from engineering services, security and manpower services.
Increase in gross losses from transport services was due to low utilisation of buses, and the global hike in fuel prices. Increase in gross profits from security and manpower was due to increase in in number of technicians outsourced.
- Other Income:
Other Income decreased from $2.78 million in FY2021 to $1.68 million in FY2022. There were lower government grants received mainly due to the ending of the Job Support Scheme.
- Administrative Expenses:
Administrative expenses decreased by $0.8 million from $5.31 million in FY2021 to $4.51 million in FY2022 mainly due to write off of IPO expenses of $1.22 million in FY2021. There were no such expenses in FY2022. This was offset by increased staff costs and listing expenses in FY2022.
- Other Expenses:
Other expenses increased from $0.39 million in FY2021 to $0.51 million in FY2022 mainly due to higher losses on disposal of scaffolding assets, depreciation charges and bank loan administrative fees.
- Finance Costs:
Decrease in finance costs was mainly due to lower interest costs for lease liabilities, which was due to lower outstanding principal amounts.
There was a tax credit of $160,000 in FY2022 mainly due to reversal of temporary differences.
- Net Loss after tax:
Net Loss after tax increased from $0.99 million in FY2021 to $1.44 million in FY2022. This was due to lower gross profit, lower government grants received, and higher depreciation. This was offset by lower administrative expenses.
B. Consolidated Statement of Financial Position as at 30 June 2022
- Non-Current Assets:
Non-current assets decreased to $9.41 million as at 30 June 2022 from $11.18 million as at 30 June 2021, mainly due to depreciation of property, plant and equipment, offset by new purchases.
- Current Assets:
Current assets decreased to $12.86 million as at 30 June 2022 from $14.83 million as at 30 June 2021. This was mainly due to decrease in cash and cash equivalent, and decrease in trade receivables, offset by increase in contract assets.
Decrease in cash and equivalent was mainly due to payment of dividends, and repayment of bank loans. Increase in contract assets was due to higher outstanding billings for manpower services rendered.
- Non-Current Liabilities:
Non-current liabilities decreased to $1.43 million as at 30 June 2022 from $2.38 million as at 30 June 2021. This was mainly due to decrease in non-current lease liabilities, and decrease in loans and borrowings.
Decrease in non-current lease liabilities, and loans and borrowings were due to reclassification of amounts that have turned current.
- Current Liabilities:
Current liabilities decreased to $6.70 million at 30 June 2022 from $6.98 million as at 30 June 2021, mainly due to decrease in lease liabilities, and trade and other payables, offset by increase in loans and borrowings.
Decrease in lease liabilities was due to instalment repayments. Decrease in other payables was mainly due to deferred income at 30 June 2021 being recognised in FY2022. Increase in loans and borrowings was due to drawdown of a loan classified as current.
C. Consolidated Statement of Cash Flows (Full Year FY2022)
Net cash used in operating activities in FY2022 amounted to $0.79 million. Operating cash flow before working capital changes was $1.01 million. However, this was offset by net working capital changes which amounted to deficit of $1.76 million. Net working capital changes was mainly due to an increase in contract assets of $1.93 million.
Net cash used in investing activities in FY2022 amounted to $0.80 million. This was mainly due to acquisition of property, plant and equipment.
Net cash used in financing activities in FY2022 amounted to $1.99 million. This was mainly due to payment of lease liabilities; repayment of loans and borrowings, and payment of dividends, offset by drawdown of a bank loan.
Our engineering services is subject to external factors such as the outlook for the marine and offshore, and petrochemical sectors, which will indirectly affect the demand for our scaffolding, insulation and related services. These sectors are not expected to see any robust growth, and contribution from our engineering services is expected to be moderated.
Fuel prices have recently eased off and this may provide some short-term relief to high costs in our transport services. However, due to uncertainties in market conditions, this segment is expected to remain challenging.
We expect increases in the number of our personnel to be deployed and outsourced, due to increasing demands for manpower as a result of resumption of activities Thus our security and manpower services segment is expected to maintain its stable contribution.
The Group overall results will be affected by the increase in manpower and operating costs, manpower shortages, and any disruptions in supply chain. However, the Group shall focus its efforts to increase revenue and take advantage of any improvements in the economic situation.