ANNUAL REPORT 2015
9
Financial
Review
Changes in inventories
The Group registered a decrease of approximately $0.2 million in
the closing balance of our inventories in FY2015, as compared to an
increase of approximately $0.7 million in FY2014. The fluctuations in
the closing balance of inventories were due to the timing of purchases
and consumption of inventories. The significant increase in the closing
balance of our inventories in FY2014 was due to bulk purchase of raw
materials towards the end of FY2014.
Other income
Other income increased by 23.1% or $0.6 million, from $2.6 million
in FY2014 to $3.2 million in FY2015, due mainly to a $0.1 million
increase in gain from sale of investments and the receipt of $0.3
million in incentives under the Wage Credit Scheme.
Employee benefits expense
Employee benefits expense increased by 14.2% or $4.4 million,
from $30.4 million in FY2014 to $34.8 million in FY2015, due to an
increase in headcount, salaries, bonuses and benefits to support our
business expansion.
Operating lease expenses
Operating lease expenses increased by 16.8% or $1.5 million, from
$8.8 million in FY2014 to $10.3 million in FY2015, due to the opening
of our new JPOT outlet at Parkway Parade in Singapore, as well as
an increase in rental expenses for our existing outlets. The increase
in operating lease expenses was also the result of the leasing of an
additional office unit.
Utilities expenses
Utilities expenses increased by 3.5% or $0.1 million, from $3.5 million
in FY2014 to $3.6 million in FY2015. This is in line with the increase
in number of outlets.
Depreciation expenses
Depreciation expenses increased by 10.5% or $0.4 million, from $3.1
million in FY2014 to $3.5 million in FY2015, due mainly to renovation
of premises for new outlets, additions to office and kitchen equipment,
furniture and fittings and motor vehicles.
Other operating expenses
Other operating expenses increased by 14.4% or $1.6 million, from
$11.5 million in FY2014 to $13.1 million in FY2015, due mainly to a
$1.0 million increase in professional fees (incurred in connection with
the restructuring exercise and preparation work for the IPO) and a
$0.4 million increase in repair and maintenance expenses.
Profit after tax
Profit after tax decreased by 3.3% or approximately $0.5 million, from
$13.8 million in FY2014 to $13.3 million in FY2015, due mainly to
professional fees incurred for the preparation work for the IPO as
well as expenses incurred for our second outlet in Shanghai which
commenced operations in August 2015.
REVIEW OF THE GROUP’S FINANCIAL POSITION
Current assets
The Group’s current assets increased by $10.4 million from $57.6
million as at 30 September 2014 to $68.0 million as at 30 September
2015. Cash and cash equivalents increased by $12.6 million.
Trade and other receivables increased by $1.3 million. Short-term
investments decreased by $3.1 million due to disposal of investments
in quoted equity securities in FY2015. The structured fixed deposit
matured in August 2015.
Non-current assets
The Group’s non-current assets increased by $2.1 million from $13.4
million as at 30 September 2014 to $15.5 million as at 30 September
2015. This was due to an increase of $2.0 million in property, plant
and equipment as a result of renovation of premises for new outlets,
as well as additions to office and kitchen equipment, furniture and
fittings and motor vehicles.
Current liabilities
The Group’s current liabilities decreased by $0.4 million from $18.0
million as at 30 September 2014 to $17.6 million as at 30 September
2015. The increase in trade and other payables by $0.3 million was
due to an increase in accrued employees’ bonuses. The decrease in
income tax payable by $0.6 million was mainly due to tax payment.
Non-current liabilities
The Group’s non-current liabilities decreased by $0.3 million from $1.0
million as at 30 September 2014 to $0.7 million as at 30 September
2015 due to payment of finance leases and bank borrowings.
REVIEWOF THE GROUP’S CASH FLOW STATEMENT
The Group generated net cash from operating activities before
changes in working capital of $18.1 million. Net cash used in working
capital amounted to $0.7 million due to an increase in trade and other
receivables of $1.3 million which was partially offset by an increase in
trade and other payables of $0.3 million and a decrease in inventories
of $0.2 million. The Group also paid income tax of $2.5 million. As a
result, net cash generated from operating activities was $15.0 million.
Net cash used in investing activities amounted to $2.0 million, due to
payments of $5.5 million for the acquisition of plant and equipment,
partially offset by proceeds from the disposal of short-term investments
in quoted securities of $3.4 million and dividends received from short-
term investments in quoted securities of $0.1 million.
Net cash used in financing activities of $0.5 million was due to payment
of dividends amounting to $1.0 million, as well as repayment of bank
borrowings and finance leases amounting to $0.3 million, partially
offset by maturity of a structured fixed deposit of $0.2 million and
an additional capital contribution of $0.6 million from non-controlling
interest in a subsidiary.
