Financials

Review

Statement of comprehensive income

The Group achieved revenue of $200.28 million for the 9 months ended 31 March 2012, an increase of 11.04% from $180.36 million in the last corresponding period. The cable and wire segment was the biggest contributor to the revenue growth, posting an increase of 13.39% as a result of higher quantities of cables sold. Cast Laboratories Pte Ltd Group acquired on 31 January 2012 contributed $4.92 million (2.46%) of the Group's revenue for the current period.

In the last financial year, the Group's operation in Canterbury, New Zealand suffered damage to its land and buildings as a result of earthquakes and aftershocks. During the period, the Group received insurance claims for the damaged buildings amounting to $1.13 million. This insurance sum recovered was included in other operating income. Correspondingly, an impairment loss of $1.13 million was provided for the affected properties and included under other operating expenses.

Other operating income increased by $3.26 million, mainly due to the followings:

1. Receipt of insurance claims for the damaged buildings amounting to $1.13 million as mentioned above; and
   
   
2. The excess of net identifiable assets over consideration arising from acquisition of the Cast Laboratories Pte Ltd Group amounting to $1.76 million. The management is in the midst of determining the fair value of identifiable assets and liabilities at the acquisition date.
   
   

The Group's administrative, selling and distribution expenses increased by 12.52%, mainly due to the increase in business activities for the period, higher staff costs incurred and acquisition of subsidiaries.

The Group reported profit before income tax of $16.31 million for the 9 months ended 31 March 2012, an increase of $7.39 million (82.92%) compared to the 9 months ended 31 March 2011. This was primarily due to higher revenue achieved in current period and excess of net identifiable assets over consideration arising from acquisition of subsidiaries during the period.

Statement of financial position

Cash and bank balances decreased by $5.35 million, due to settlement of bank borrowings towards period end. The settlement of bank borrowings also resulted in a corresponding drop in bank overdrafts and short- term bank borrowings by $4.40 million as at period end.

Trade receivables increased by $21.46 million, tied particularly to the acquisition of subsidiaries and delay in payments by customers towards period end.

Other receivables increased by $1.26 million. This was primarily attributable to acquisition of subsidiaries offset by receipts from the insurance claims for compensation resulting from the earthquakes in New Zealand in the previous year.

Contract work-in-progress increased by $1.20 million mainly attributable to acquisition of subsidiaries.

Inventories decreased by $3.58 million. This was due to lower purchases from the electrical material distribution segment. Inventories for the cable and wire segment also dropped as a result of higher sales towards period end.

Property, plant and equipment increased by $3.82 million, mainly attributable to acquisition of subsidiaries offset by impairment loss on freehold properties of $1.13 million as a result of earthquakes in New Zealand.

Intangible assets increased by $1.03 million as a result of acquisition of subsidiaries. Intangible assets comprise mainly customer relationships, software and patents.

Trade payables increased by $6.07 million to $28.78 million, mostly due to acquisition of subsidiaries, higher purchases in the cable and wire segment offset by lower purchases by the electrical material distribution segment.

Finance leases increased by $1.27 million as a result of acquisition of subsidiaries which used to finance machineries and vehicles.

Long-term bank borrowings increased by $0.91 million mainly because of acquisition of subsidiaries offset by early settlement of certain loans after receipts from the insurance claims.

Statement of cash flows

The cash and cash equivalent at the end of the period decreased to $10.54 million compared with $13.98 million at the end of the previous period.

The net cash from operating activities of $9.15 million was mostly due to higher sales, lower purchases, bonus payout and income tax paid during the period.

The net cash used in investing activities of $1.95 million was mainly used for purchase of plant and equipment and acquisition of subsidiaries, net of proceeds from disposal of property, plant and equipment.

The net cash used in financing activities of $13.26 million was largely attributed to repayment of bank borrowings, repayment of redeemable bond, interest and dividends paid.

Commentary

The Group's cable and wire segment will continue to explore business opportunities in the public works sector and other public infrastructure projects.

The electrical material distribution segment will keep up its focus on the supply of eco-friendly, energy-efficient and cost-saving solutions for the electronic, pharmaceutical and chip-making industries, and acquire new and relevant product lines that can further enhance its capability to provide one-stop solutions to customers.

The Group will also seek other opportunities in its core businesses to enhance returns to shareholders.