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Review of Performance
Revenue and Profitability
The Group's revenue for the financial period ended 31 March 2017 ("3M2017") was maintained at $10.5 million, a marginal increase of 0.8% as compared to financial period ended 31 March 2016 ("3M2016"). While the revenue from new outlets has increased by $2.2 million, it was offset by a decrease in revenue from existing outlets and closure of outlets. Revenue for the food processing, distribution and procurement services segment has decreased by $0.1 million due to rescheduling of promotional events.
Other income decreased by $0.1 million mainly related to government grants received for the Wage Credit Scheme and Special Employment Credit.
Purchases and other consumables saw an improvement of 0.7 percentage point at 21.8% of revenue as compared to 3M2016 due to tightening of cost controls. Employee benefits expense increased by $0.1 million or 1.5% in 3M2016 mainly due to a net increase from opening and closure of outlets, offset by a reduction in headcount and related staff costs for existing outlets.
Other expenses increased by $0.4 million or 12.6% in 3M2017 mainly due to a net increase in operating lease expenses and utilities of $0.3 million as a result of the opening and closure of outlets as well as an increase in advertising expenses and contract workers of $0.1 million.
As a result, the profit before income tax decreased by $0.4 million or 48.2% as compared to 3M2016. Earnings per share stood at 0.13 cents in 3M2017.
Review of Financial and Cash Flow Position
Non-current assets decreased by $0.1 million from $3.6 million as at 31 December 2016 ("FY2016") to $3.5 million as at 31 March 2017 ("1Q2017") mainly due to depreciation expenses of $0.4 million and the disposal and writing off of plant and equipment amounting to $0.1 million. This was offset by additions of plant and equipment of $0.4 million.
Current assets decreased by $0.3 million as compared to FY2016 mainly due to a decrease in cash and cash equivalents of $0.4 million, offset against an increase in trade and other receivables of $0.1 million. The decrease in cash and cash equivalents was attributable mainly to payments to contractors for renovation costs of $0.9 million, partially offset by net cash from operating activities of $0.5 million.
Current liabilities decreased by $0.7 million mainly due to a decrease in trade and other payables as a result of payments for purchases of plant and equipment recorded as at FY 2016.
Total equity increased by $0.4 million and net asset value per share stood at 3.37 cents as at 1Q2017.
The Group has completed the evaluation of under-performing outlets, retaining and re-focusing those with the potential to turnaround and exiting those which are no longer in line with the Group's targets. The Group will now focus on strengthening our brands with an intention to increase product offerings, while looking for prime locations within Singapore and overseas for expansion and taking the opportunity to consolidate and streamline processes to achieve economies of scale.
At the same time, the Group has plans to increase its central processing resources to increase its distribution capacity, tighten costs control and improve its productivity. The food processing and distribution business remains focused on its core strategies to assist the Group through procurement sourcing and management, as well as widening its distribution networks for its fast-moving consumer goods and ready meals.