Profit or Loss

Balance Sheet

Review of Performance

A. Consolidated Statement of Comprehensive Income (1H FY2024 vs 1H FY2023)

1. Revenue:
   

   Total revenue decreased by $1.45 million or 11.3% from $12.78 million in 1H FY2023 to $11.33 million in 1H FY2024. The decrease was mainly due to lower revenue from engineering services, and security and manpower services. This was partially offset by higher revenue from transportation services.

   Decrease in engineering services revenue was due to more contracts ending and being completed in 2H FY2023. Decrease in security and manpower services revenue was due mainly to decrease in revenue from manpower outsourcing. Increase in revenue from transportation services was due to more contracts being executed in 1HFY2024.

2. Cost of Sales:
   

   Cost of sales decreased by $1.61 million or 13.5% from $11.99 million in 1H FY2023 to $10.38 million in 1H FY2024. The decrease was in line with the decrease in revenue from security and manpower services.

3. Gross Profit:
   

   Gross profit increased by $0.16 million or 20.8% from $0.79 million in 1H FY2023 to $0.95 million in 1H FY2024. Correspondingly, the gross profit margins improved from 6.2% in 1H FY2023 to 8.4% in 1H FY2024. The increase in gross profit margins was due to a higher utilisation of our bus assets as a result of the rationalisation exercise conducted in FY2023.

4. Other Income:
   

   Other income increased from $0.27 million in 1H FY2023 to $0.41 million in 1H FY2024. This was largely attributable to rental from investment property.

5. Administrative Expenses:
   

   Administrative expenses decreased from $2.11 million in 1H FY2023 to $1.88 million in 1H FY2024. This was largely attributable to productivity initiatives to enhance efficiency in FY2023 which resulted in a corresponding decrease in headcount for managerial and administrative staff.

6. Other Expenses:
   

   Other expenses decreased from $0.64 million in 1H FY2023 to $0.48 million in 1H FY2024. This was largely attributable to the losses incurred resulting from bus disposal in 1H FY2023 that was absent for 1H FY2024.

7. Finance Costs:
   

   Finance costs increased from $80,000 in 1H FY2023 to $141,000 in 1H FY2024. This was due to the increase in loan borrowings.

B. Consolidated Statement of Financial Position as at 31 December 2023

1. Non-Current Assets:
   

   Non-current assets increased to $15.35 million as at 31 December 2023 from $6.67 million as at 30 June 2023, mainly due to acquisition of investment property.

2. Current Assets:
   

   Current assets decreased to $9.36 million as at 31 December 2023 from $12.46 million as at 30 June 2023. This was mainly due to improved collection from trade receivables and contract assets, as well as increased in sales of inventories, offset by decrease in cash due to investment in investment property.

3. Non-Current Liabilities:
   

   Non-current liabilities increased to $7.26 million as at 31 December 2023 from $1.08 million as at 30 June 2023. This was mainly due to increase in non-current loans and borrowings.

4. Current Liabilities:
   

   Current liabilities increased to $6.68 million at 31 December 2023 from $6.15 million as at 30 June 2023, mainly due to increase in loans and borrowings.

   Increase in loans and borrowings were due to acquisition of investment property.

C. Consolidated Statement of Cash Flows (1H FY2024)

1. Net cash generated from operating activities in 1H FY2024 amounted to $2.13 million. This was mainly due to decreases in trade and other receivables, contract assets and inventories.

2. Net cash used in investing activities in 1H FY2024 amounted to $2.28 million. This was mainly due to acquisition of investment property.

3. Net cash used in financing activities in 1H FY2024 amounted to $0.87 million. This was mainly due to payment of lease liabilities as well as repayment of loans and borrowings.

Commentary

For the Engineering business, Building and Construction Authority (“BCA”) anticipates demand for construction across Singapore for 2024 to range between S$32 billion and S$38 billion, with public sector projects expected to contribute about 55% of total demand.1 Given that we have an existing track record in the Engineering business, we will strive to capture infrastructure projects with good margins.

For our transportation business, the Group expects demand for its transport services to improve, but will be at the same time challenged with manpower shortages. The Group will look to selectively take on new contracts with good margins, including the hiring of new drivers where possible.

For our security and manpower business, the Group foresees an increase in cost due to the progressive wage model implemented by Ministry by Manpower from 2022. Going forward, the Group will be strategic in the securing of new projects to ensure that the margins are improved.

Operating within this current challenging and uncertain environment, the Group remains focused on its efforts to ride on any improvements in the economic situation, and to improve on its results.