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Half Year Financial Statements and Dividend Announcement for the 6 months financial period ended 30 June 2018

Financials Archive

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Profit & Loss

Profit & Loss

Comprehensive Income

Comprehensive Income

Balance Sheets

Balance Sheet

Review of Performance

Review of Income Statement

The Group generated revenue of S$66.0 million in the half year ended 30 June 2018 ("HY201"), an increase of S$12.0 million, or 22.1% as compared to the half year ended 30 June 2017 ("HY2017). The increase in revenue was mainly due to higher local sales to Aircon wholesalers booked by our Trading Department, and maiden contribution of revenue from regional sales by our new 51%-owned subsidiary pursuant to the joint venture agreement with JNVHC Pte. Ltd in August 2017.

Gross profit margin decreased by 2.0 percentage points from 15.0% in HY2017 to 13.0% in HY2018. This was mainly due to our Aircon Division selling lower margin products in response to customers' demands, lower project margins in HY2018 compared with HY2017, and lower occupancy rates in our Tai Seng corporate headquarter at our Investment Division.

Other income increased by S$0.4 million or 119.9% in HY2018. The increase was due mainly to recovery of legal expenses from our insurers, and higher rental income generated from the property at 87 Defu Lane 10 which was acquired in November 2017.

Distribution expenses increased by S$0.3 million or 43.5% to S$1.1 million in HY2018 due mainly to higher entertainment and travelling expenses as a result from increased business development efforts to boost sales.

Administrative expenses increased by S$0.1 million due mainly to depreciation, property tax and land rent of property at 87 Defu Lane 10. However, legal and professional fees have decreased due to the conclusion of several legal matters in HY2018.

Finance costs increased by S$0.1 million or 41.8% to S$0.3 million in HY2018 which was due mainly to financing of property at 87 Defu Lane 10.

Arising from the above, the Group reported a loss attributable to owners of Company of S$0.4 million in HY2018 as compared with S$0.6 million in HY2017.

Review of Statements of Financial Position

Non-current assets decreased by S$2.9 million to S$33.1 million as at 30 June 2018 from S$36.0 million as at 31 December 2017. The decrease was due mainly to disposals of properties. The disposal of 42 Toh Guan Road East #01-81 was completed in June 2018 while the planned disposal of 42 Toh Guan Road East #01-82 was completed in July 2018 and was reclassified from non-current assets to current assets (asset held for sale) as at 30 June 2018.

Trade and other receivables increased by S$2.4 million to S$18.5 million as at 30 June 2018 from S$16.1 million as at 31 December 2017. The increase was due mainly to higher Aircon sales in May 2018 and June 2018 which are not due for collection.

Contract assets decreased by S$1.0 million to S$4.3 million as at 30 June 2018 from S$5.3 million as at 31 December 2017, mainly due to reduction of retention from commercial installation customers due to completion of several projects in HY2018.

Assets held for sale as at 30 June 2018 relates to the planned disposal of Aircon Division's property at 42 Toh Guan Road East #01-82 and Paint Division's property at 38 Lok Yang Way.

Total loans and borrowings decreased by S$0.4 million to S$24.4 million as at 30 June 2018 from S$24.8 million as at 31 December 2017. The decrease was due mainly to repayment of bank loans.

Trade and other payables increased by S$1.7 million to S$20.0 million as at 30 June 2018 from S$18.3 million as at 31 December 2017. The increase was due mainly to higher purchases made by our Aircon Division in May 2018 and June 2018.

Contract liabilities decreased by S$1.2 million to S$16.2 million as at 30 June 2018 from S$17.4 million as at 31 December 2017, as we completed and delivered several commercial installation projects in HY2018.

Review of Statement of Cash Flows

In HY2018, the Group recorded net cash outflow of S$0.2 million from operating activities. This was due to cash flow from operating activities before changes in working capital and provisions of S$0.5 million in HY2018, increase in trade and other payables and a reduction in contract assets, offset by increases in trade and other receivables and reduction in contract liabilities.

The Group recorded net cash of S$0.2 million generated from investing activities in HY2018 mainly due to the proceeds from disposing the property located at 42 Toh Guan Road East #01-81. The cash inflow was offset by the capital expenditures on renovations at 87 Defu Lane 10 and motor vehicles purchased.

Net cash outflow of S$1.1 million in HY2018 for financing activities was mainly due to the repayment of bank borrowings for the Group's properties, finance lease liabilities and interest charges.


The Board of Directors of the Company expects the Group's operating environment and conditions to be challenging for the next 12 months. The Group will continue to enhance its efforts to promote sales and to increase margins by improving operational efficiency and rationalising cost structure in order to enhance our competitiveness.

With respect to our Aircon Division, we expect to face market challenges arising from the introduction of additional property cooling measures announced in July 2018. In addition, any significant appreciation of the US Dollar may impact the cost of our imports of Aircon materials.

For the Paint Division, it is anticipated that the impending sale of 38 Lok Yang Way will ease interest cost and working capital burdens and barring any unforeseen circumstances, steer the paint business into profitability.