Financial Performance Review

• REVENUE

  Revenue increased by $2.5 million or 4.3% to $61.8 million for the financial year ended 30 June 2021 ("FY2021") from $59.3 million for the financial year ended 30 June 2020 ("FY2020").

  • Marine & Offshore Segment revenue in FY2021 decreased by 7.0% or $4.1 million in FY2021 as compared to FY2020. The decrease was mainly attributable to decreased revenue contribution from the mooring and rigging business. The water treatment and engineering business contributed to a decrease of $0.7 million and $0.4 million respectively.
  • Revenue contribution from Property Segment increased by $6.6 million in FY2021 as compared to FY2020. The increase was attributable to the sale of a detached landed property.
• GROSS PROFIT

  The Group’s gross profit of $21.8 million in FY2021 decreased by $0.3 million or 1.3% from $22.1 million in FY2020. The Group’s gross profit margin also decreased to 35.3% in FY2021 as compared to 37.3% in FY2020.

  • Marine & Offshore Segment contributed gross profit of $20.5 million to the Group in FY2021 as compared to $21.2 million in FY2020. Despite the decrease in gross profit, the gross profit margin increased to 37.8% in FY2021 from 36.3% in FY2020. The increase in gross profit margin was mainly due to change in the composition of products being sold in FY2021, with increased sales of higher-margin products.
  • Property Segment contributed gross profit of $1.3 million to the Group in FY2021, of which $1.1 million was contributed by the Group’s property consultancy business.
• OTHER OPERATING INCOME

  Other income increased by $0.6 million or 78.0% to $1.4 million in FY2021 from $0.8 million in FY2020. The increase was mainly due to the receipt of the Singapore Government’s Jobs Support Scheme payouts of $0.8 million which was recognised in FY2021. The increase was offset by the absence of rental income from investment properties which were disposed of in the current year.

• DISTRIBUTION EXPENSES

  Distribution expenses decreased by $0.2 million or 12.1% to $1.2 million in FY2021 from $1.4 million in FY2020. The decrease was mainly due to cancellation of business travel and trade exhibition as a result of the travel bans and restrictions arising from the COVID-19 pandemic.

• ADMINISTRATIVE EXPENSES

  Administrative expenses decreased by $47,000 or 0.4% mainly due to reduction in bank charges and employee benefit expenses.

• OTHER OPERATING EXPENSES

  Other operating expenses decreased by $1.0 million in FY2021. The decrease was mainly due to:

  • Absence of foreign exchange loss by $0.4 million due to fluctuation in United States Dollar ("USD") against Singapore Dollar ("SGD").
  • Absence of fair value loss on interest rate swap of $0.2 million.
  • Decrease in impairment loss on trade and other receivables and contract assets by $0.1 million.
  • Absence of impairment loss on investment property of $0.1 million.
  • Decrease in depreciation of property, plant and equipment and investment properties by $0.2 million, which is due mainly to the absence of depreciation on investment properties as it had been disposed of during the year.
  • Decrease in bad debts written off by $37,000 to $2,000 in FY2021 from $39,000 in FY2020.
  • Decrease in transportation, entertainment, telecommunication and general expenses by $16,000 as most of the employees were working from home due to the COVID-19 pandemic.
• FINANCE INCOME

  The decrease in the Group’s finance income, comprising mainly interest income from bank deposits, remained insignificant for FY2021.

• FINANCE COSTS

  Finance costs decreased by $0.5 million or 34.5% in FY2021 from $1.5 million in FY2020. The decrease was mainly due to lower interest rates in FY2021 and repayment of term loans.

• INCOME TAX EXPENSE

  In FY2021, the Group incurred an income tax expense of $0.9 million as compared to $0.8 million in FY2020.

• PROFIT FOR THE YEAR

  Combining the profit before tax of $4.7 million for the Marine & Offshore Segment, loss before tax of $0.2 million for the Property Development Segment and the unallocated head office expenses and share of results of equity-accounted investees of $0.4 million, the Group’s profit before tax was $4.1 million in FY2021 as compared to a profit before tax of $2.0 million in FY2020. After accounting for income tax of $0.9 million, the Group’s profit for FY2021 is $3.2 million as compared to a profit of $1.2 million in FY2020.

Financial Position Review

• NON-CURRENT ASSETS

  Non-current assets decreased to $13.3 million as at 30 June 2021 from $13.6 million as at 30 June 2020. This decrease was mainly due to the following:

  • Depreciation of property, plant and equipment of $0.3 million.
  • Utilisation of deferred tax assets in current year of $0.1 million.

  The decrease was offset by the following:

  • Investment in associates of $0.1 million, comprising of a 26.0% equity interest in Paneltec Pte. Ltd. in September 2020.
• CURRENT ASSETS

  Current assets of $43.6 million as at 30 June 2021 decreased by $9.3 million or 17.7% from $52.9 million as at 30 June 2020. The decrease was mainly due to the following:

  • Assets held for sale decreased by $3.2 million following the disposal of two leasehold properties in the current year.
  • Inventories decreased by $1.1 million from $22.3 million as at 30 June 2020 to $21.2 million as at 30 June 2021. The decrease in inventory is in line with the decrease in sales of Marine & Offshore Segment’s revenue in FY2021. Despite the decrease in the inventory, the inventory turnover days for Marine & Offshore Segment in FY2021 increased to 236 days from 210 days in FY2020. The increase in inventory turnover days was mainly due to slowdown in sales during the year.
  • Development properties decreased by $5.4 million from $10.8 million as at 30 June 2020 to $5.4 million as at 30 June 2021. The decrease was due to the sale of the Farleigh Avenue project during the period.
  • Trade and other receivables decreased by $1.2 million, which is in line with the decrease in the Marine & Offshore Segment’s revenue in FY2021.
  • Tax recoverable decreased by $0.1 million.

  The decrease stated above was offset by the increase in cash and cash equivalents by $1.7 million. Please refer to the "Cash Flows Review" section below for details.

• NON-CURRENT LIABILITIES

  Non-current liabilities decreased by $3.0 million or 19.3% to $12.3 million as at 30 June 2021 from $15.3 million as at 30 June 2020. The decrease was mainly due to the following:

  • Non-current portion of loans and borrowings decreased by $2.8 million, mainly due to (i) reclassification of land and construction loans of $3.3 million to current portion and (ii) repayment of term loans of $2.1 million. The decreases were offset by $2.6 million increase in term loans.
  • Decrease in lease liabilities by $0.1 million as a result of payments of lease liabilities of $0.3 million and termination of lease contracts of $0.3 million. The decreases were mitigated by addition of new leases of $0.5 million.
  • Fair value adjustment on derivatives financial liabilities of $0.1 million.
• CURRENT LIABILITIES

  Current liabilities decreased by $10.0 million or 27.4% to $26.4 million as at 30 June 2021 from $36.4 million as at 30 June 2020. The decrease was mainly due to the following:

  • Decrease in lease liabilities of $0.3 million as a result of payments of lease liabilities of $0.6 million and termination of lease contracts of $0.2 million. The decreases were mitigated by addition of new leases of $0.5 million.
  • Current portion of loans and borrowings decreased by $9.2 million, mainly due to (i) repayment of land and construction loans of $4.5 million as the Group sold its development at 88 Farleigh Avenue and (ii) repayment of term loans and trust receipts of $28.5 million. The decreases were offset by a reclassification of land and construction loans of $3.3 million from the non-current portion as well as a $20.5 million increase in term loans and trust receipts.
  • Trade and other payables decreased by $0.1 million due to decrease in purchases as a result of decrease in Marine & Offshore Segment revenue in FY2021.
  • Contract liabilities decreased by $0.1 million.
  • Current tax liabilities decreased by $0.3 million.
• SHAREHOLDERS' EQUITY

  Shareholders’ equity increased by $3.2 million or 21.7% to $18.1 million as at 30 June 2021 from $14.9 million as at 30 June 2020. The increase was mainly due to the net profit recorded for FY2021 amounting to $3.2 million.

Cash Flows Review

• CASH FLOWS FROM OPERATING ACTIVITIES

  Operating cash inflows before changes in working capital was $6.7 million in FY2021. Net cash inflow used in working capital was $7.6 million due to the following:

  • Cash inflows arising from a decrease in inventories of $1.2 million;
  • Cash inflows arising from a decrease in development properties of $5.5 million;
  • Cash outflows arising from an increase in contract costs of $0.1 million;
  • Cash inflows arising from a decrease in trade and other receivables of $1.1 million;
  • Cash inflows arising from a decrease in contract assets of $0.1 million;
  • Cash outflows arising from an increase in trade and other payables of $0.1 million; and
  • Cash outflows arising from an increase in contract liabilities of $0.1 million.

  After deducting income taxes paid of $1.0 million, net cash from operating activities in FY2021 was $13.3 million.

• CASH FLOWS USED IN INVESTING ACTIVITIES

  Net cash from investing activities in FY2021 was $2.4 million, attributed to the following:

  • Investment in an associate company amounting to $0.1 million;
  • Purchase of property, plant and equipment by the Marine & Offshore Segment totalling $0.8 million;
  • Proceeds from sale of assets held for sale amounting to $3.2 million; and
  • Proceeds from sale of plant and equipment amounting to $0.1 million.
• CASH FLOWS FROM FINANCING ACTIVITIES

  Net cash used in financing activities in FY2021 was $14.0 million, mainly attributable to the following:

  • Interest paid of $1.1 million;
  • Repayment of bank borrowings and lease liabilities totalling $36.0 million; and
  • Proceeds from bank borrowings amounting to $23.1 million.

  As a result of the above, cash and cash equivalents increased by approximately $1.7 million during FY2021. Cash and cash equivalents as at 30 June 2021 were $7.0 million.