Revenue
Our total revenue increased by approximately S$4.00 million or 5.7%, from approximately S$70.95 million in FY2012 to approximately S$74.96 million in FY2013 due mainly to an increase in the revenue from our Distribution Business segment.
Distribution Business
Our revenue from the Distribution Business segment increased by approximately S$4.00 million or 5.7%, from approximately S$70.69 million in FY2012 to approximately S$74.70 million in FY2013. The increase was mainly due to: (i) an overall increase in sales to our retail customers along with the broad based growth of the construction sector in Singapore over the same period; and (ii) higher sales of “CCM” and “CRM” brand of electrical products and accessories.
Property Investment
Cost of Sales
Our cost of sales increased by approximately S$1.83 million or 3.6%, from approximately S$50.70 million in FY2012 to approximately S$52.53 million in FY2013, which was generally in tandem with the increase in our revenue over the same period. The increase in our cost of sales was mainly due to an increase in the cost of sales attributable to our Distribution Business segment.
Distribution Business
Our cost of sales of the Distribution Business segment increased by approximately S$1.83 million or 3.6%, from approximately S$50.52 million in FY2012 to approximately S$52.35 million in FY2013. The net increase in our cost of sales of our Distribution Business segment was mainly due to: (i) an increase in the allowance for stock obsolescence of approximately S$2.38 million due to provision for certain slow- moving stocks of third party brands as we sold more products under our own “CCM” and “CRM” brands; and (ii) an increase in transportation cost of approximately S$0.40 million relating to overseas purchases of electrical products and accessories. These increases were partially offset by a decrease in our cost of sales which amounted to approximately S$0.95 million due to cost savings that arose from higher sales of electrical products and accessories under our “CCM” and “CRM” brands during FY2013.
Property Investment
Our cost of sales of the Property Investment segment increased by approximately S$2,000 or 1.1%, from approximately S$177,000 in FY2012 to approximately S$179,000 in FY2013. The net increase was a result of: (i) an increase in interest expense incurred on our property loans of approximately S$16,000; and (ii) an increase in property tax of approximately S$11,000, which were partially offset by a decrease in the property management fee and depreciation expense of approximately S$10,000 and S$15,000 respectively.
Gross Profi t and Gross Profi t Margin
Our gross profi t increased by approximately S$2.18 million or 10.8%, from approximately S$20.25 million in FY2012 to approximately S$22.43 million in FY2013.
Our overall gross profi t margin increased by approximately 1.4% from approximately 28.5% in FY2012 to approximately 29.9% in FY2013, which was mainly due to an increase in the gross profi t margin of our Distribution Business segment.
The gross profi t margin of our Distribution Business segment increased from approximately 28.5% in FY2012 to approximately 29.9% in FY2013, due to higher sales of electrical products and accessories under our “CCM” and “CRM” brands, which generally enjoyed better profi t margins, during FY2013.
Other Operating Income
Our other operating income increased by approximately S$3.66 million or 762.5%, from approximately S$0.48 million in FY2012 to approximately S$4.15 million in FY2013. The net increase was a result of: (i) an increase in gain on disposal of investment properties of approximately S$3.60 million; and (ii) an increase in sponsorship received from our suppliers of approximately S$0.04 million, which were partially offset by: (i) a decrease in gain on disposal of plant and equipment of approximately S$4,000; and (ii) a decrease in interest income of approximately S$5,000.
Administrative Expenses
Our administrative expenses increased by approximately S$0.24 million or 2.4%, from approximately S$10.04 million in FY2012 to approximately S$10.28 million in FY2013. The net increase was a result of: (i) an increase in staff related costs of approximately S$0.25 million; and (ii) an increase in property tax for investment properties completed during FY2013 of approximately S$0.02 million, which were partially offset by: (i) a decrease in general expenses of approximately S$0.02 million; and (ii) a decrease in rental expenses of approximately S$6,000 in FY2013.
Finance Costs
Our fi nance costs increased by approximately S$0.06 million or 85.7%, from approximately S$0.07 million in FY2012 to approximately S$0.13 million in FY2013. The increase was mainly due to: (i) an increase in the interest expense paid on our bank loans of approximately S$0.03 million; and (ii) an increase in the interest expense paid on a working capital loan from UMS to Neiken of approximately S$0.03 million.
Other Operating Expenses
Our other operating expenses decreased by approximately S$0.29 million or 16.2%, from approximately S$1.79 million in FY2012 to approximately S$1.50 million in FY2013. The net decrease was a result of: (i) a decrease in the allowance for impairment on account receivables of approximately S$0.39 million; and (ii) a decrease in bad debts written off of approximately S$0.07 million, which were partially offset by an increase in depreciation expense of approximately S$0.16 million.
Income Tax Expense
Our income tax expense increased by approximately S$0.28 million or 18.8%, from approximately S$1.49 million in FY2012 to approximately S$1.77 million in FY2013.
The increase in our income tax expense was mainly due to a higher profi t before income tax achieved in FY2013.
FY2014 compared to FY2013 Revenue
Our total revenue decreased by approximately S$4.52 million or 6.0%, from approximately S$74.96 million in FY2013 to approximately S$70.44 million in FY2014, due mainly to a decrease in the revenue from our Distribution Business segment which was partially offset by an increase in the rental income from our Property Investment segment.
Distribution Business
Our revenue from the Distribution Business segment decreased by approximately S$4.57 million or 6.1%, from approximately S$74.70 million in FY2013 to approximately S$70.13 million in FY2014. The decrease was mainly due to a downward adjustment in the selling prices of most of our electrical products and accessories in FY2014 as part of our Group’s strategy to maintain our price competiveness in the industry and to attract new customers.
Property Investment
Our rental income from investment properties increased by approximately S$0.06 million or 23.1%, from approximately S$0.26 million in FY2013 to approximately S$0.32 million in FY2014. The increase was
Cost of Sales
Our cost of sales increased by approximately S$0.57 million or 1.1%, from approximately S$52.53 million in FY2013 to approximately S$53.10 million in FY2014.
Distribution Business
Our cost of sales of the Distribution Business segment increased by approximately S$0.50 million or 1.0%, from approximately S$52.35 million in FY2013 to approximately S$52.85 million in FY2014, mainly due to an increase in the sales volume of electrical products and accessories resulting from our downward price adjustment for most of our electrical products and accessories. The increase was partially offset by: (i) a decrease in the allowance for stock obsolescence of approximately S$2.94 million; and (ii) a decrease in the purchase price of some of our main products as the price of certain raw materials decreased in FY2014 compared to FY2013.
Property Investment
Our cost of sales of the Property Investment segment increased by approximately S$0.07 million or 40.2%, from approximately S$0.18 million in FY2013 to approximately S$0.25 million in FY2014. The increase was mainly due to an increase in depreciation expense, property loan interest and property management fee of approximately S$0.50 million, S$0.10 million and S$0.10 million respectively as a result of three (3) new leases which commenced during FY2014.
Gross Profi t and Gross Profi t Margin
Our gross profi t decreased by approximately S$5.08 million or 22.7%, from approximately S$22.43 million in FY2013 to approximately S$17.34 million in FY2014.
Our overall gross profi t margin decreased by approximately 5.3% from approximately 29.9% in FY2013 to approximately 24.6% in FY2014, which was mainly due to a decrease in the gross profi t margin of our Distribution Business segment.
The gross profi t margin of our Distribution Business segment decreased from approximately 29.9% in FY2013 to approximately 24.6% in FY2014, mainly due to: (i) an overall increase in the purchase prices of our electrical cables; and (ii) a downward adjustment in the selling prices of most of our electrical products and accessories in FY2014 as part of our Group’s strategy to maintain our price competiveness in the industry and to attract new customers.
Other Operating Income
Our other operating income decreased by approximately S$3.74 million or 90.2%, from approximately S$4.15 million in FY2013 to approximately S$0.41 million in FY2014. The net decrease was a result of a decrease in the gain on disposal of investment properties of approximately S$3.91 million, which was partially offset by: (i) an increase in gain on disposal of property, plant and equipment of approximately S$0.09 million; (ii) an increase in government grants of approximately S$0.04 million; and (iii) an increase in bad debts recovered from customers of approximately S$0.02 million.
Distribution Costs
Finance Costs
Our fi nance costs increased by approximately S$2,000 or 1.5%, from approximately S$134,000 in FY2013 to approximately S$136,000 in FY2014. The net increase was a result of: (i) an increase in the interest expense paid on a working capital loan extended by UMS to Neiken of approximately S$10,000; and (ii) an increase in interest expense paid on our fi nance lease of approximately S$6,000, which were partially offset by a decrease in the interest expense paid on our bank loans of approximately S$14,000.
Other Operating Expenses
Our other operating expenses decreased by approximately S$0.51 million or 34.0%, from approximately S$1.50 million in FY2013 to approximately S$0.99 million in FY2014. The net decrease was a result of: (i) a decrease in the allowance for impairment on account receivables of approximately S$0.45 million; and (ii) a decrease in depreciation of approximately S$0.08 million, which were partially offset by an increase in bad debts written off of approximately S$0.03 million.
Income Tax Expense
Our income tax expense decreased by approximately S$0.58 million or 32.6%, from approximately S$1.77 million in FY2013 to approximately S$1.19 million in FY2014.
The decrease in our income tax expense was mainly due to a lower profi t before income tax achieved in FY2014.