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Review of Performance
(a) any significant factors that affected the turnover, costs, and earnings of the group for the current financial period reported on, including (where applicable) seasonal or cyclical factors; and
The Group’s revenue for the financial year ended 31 December 2018 (“FY2018”) was $43.9 million, an increase of $3.3 million or 8.1% as compared to $40.6 million for the financial year ended 31 December 2017 (“FY2017”). The increase was attributable to an increase in revenue from restaurant operation and online delivery services of $2.8 million, offset by a decrease in revenue from the closure of outlets of $0.6 million in the first quarter of FY2017. Revenue for the food processing, distribution and procurement services segment has also increased by $1.1 million.
Other income decreased by $0.1 million or 23.5% mainly due to a decrease in cash sponsorship income and an absence of a write back for expired vouchers.
Purchases and other consumables were maintained at approximately 21.5% of revenue.
Employee benefits expense increased by $0.4 million or 3.1% in FY2018 mainly due to an increase in directors’ performance bonus of $0.3 million and an increase of $0.1 million which is associated with the increased business activities for the supply of ready meals.
Other expenses increased by $1.4 million or 9.7% in FY2018 mainly due to an increase in sales commissions of $0.6 million and packing materials of $0.1 million, which are associated with online delivery and meal supply services, an increase in the cost of contract workers of $0.1 million for the central kitchen operations as well as an increase in professional fees of $0.1 million due to an absence of a write back in FY2017. Utilities and repair and maintenance increased by $0.3 million in line with higher business activities.
As a result, the profit before income tax increased by $0.4 million or 20.3% in FY2018 as compared to FY2017. Earnings per share stood at 0.78 cents in FY2018.
(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group during the current financial period reported on.
Non-current assets decreased by $0.5 million from $3.8 million, as at 31 December 2017 (“FY2017”), to $3.3 million as at 31 December 2018 (“FY2018”), mainly due to additions of plant and equipment of $1.1 million and intangible assets of $0.1 million, offset by depreciation and amortisation expenses of $1.6 million.
Current assets increased by $2.0 million or 17.1% as compared to FY2017 mainly due to an increase in trade and other receivables of $0.1 million and an increase in cash and cash equivalents of $1.9 million. Trade and other receivables increased mainly as a result of the increased revenue. The increase in cash and cash equivalents was attributable mainly to net cash from operating activities of $4.4 million, offset by payments made for purchases of plant and equipment of $1.0 million, payment for the final dividend of $1.4 million and purchase of treasury shares of $0.1 million.
Current liabilities increased by $0.8 million mainly due to an increase in trade and other payables related to accrued staff related costs and directors’ performance bonus of $0.4 million, increase in deferred income and provision for the reinstatement costs of a new outlet collectively at $0.1 million, increase in other payables related to purchases of plant and equipment of $0.1 million, and an increase in the current income tax payable of $0.2 million.
Total equity increased by $0.7 million from $10.3million, as at FY2017, to $11.0 million as at FY2018. The Group’s net asset value per share stood at 3.95 cents as at FY2018.
The Group continues to focus on strengthening our brands with plans for a cautious expansion of our portfolio of outlets in Singapore. The Group will open a new outlet located at Jewel Changi Airport in the first half of 2019. The Group will also continue to bring our food offerings to more customers through online delivery platforms from all our outlets. At the same time, the Group will continue to manage the operations of our restaurants more effectively with productivity measures with the intention to better serve our customers.
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 consumer goods and ready meals through the central kitchen located in Changi Prison Complex and a new catering kitchen located at Enabling Village which started operations in November 2018.