LETTER TO
SHAREHOLDERS
“In terms of profitability, the
Group turned around a loss
of S$9.9 million in FY14 to a
net profit of S$6.6 million in
FY15 due to the improved
performance of the Group’s
continuing operations
which yielded revenue
increases and higher gross
profit margins”... “Due to
the Company’s improved
financial position and as
a means of rewarding
shareholders for their trust
and confidence in our
Group, we are proposing
a final dividend and a
special dividend subject
to shareholders’ approval
at the upcoming Annual
General Meeting (“AGM”).”
DEAR SHAREHOLDERS
The global economy in 2014/2015 struggled to gain ground. In 2014, while the US
economy showed signs of recovery, Europe continued its tepid growth with the Euro
debt crisis still not fully resolved. The emerging economies also did not fare too well,
with China, Russia and Brazil experiencing a slowdown. The weak conditions continued
into 2015 with plunging oil prices and the economic situation in China worsening,
impacting the rest of the world. Singapore’s GDP growth was a modest 2.9% in 2014.
The GDP forecast for 2015 has been narrowed to 2% to 2.5% from an earlier forecast of
2 to 4% on weaker performance of the global economy.
Despite the subdued external economic environment, I am pleased to report that
we have turned in a profitable financial year ended 30 June 2015 (“FY15”) from a loss-
making position in FY14, due to the revenue and profit improvements achieved by our
three business segments (the Burn-in Services, Burn-in Boards and BoardManufacturing
and Engineering Services business segments).
GROUP FINANCIAL REVIEW
The Group’s revenue grew by 23.5% to S$28.4 million, from FY14’s revenue of
S$23.0 million. The improved revenue was attributed to higher revenue from all three
business segments. Geographically, the operations in Singapore contributed 49.3%
of revenue, with the overseas operations accounting for the rest.
The Group’s gross profit increased strongly by 107.1% to S$6.9 million as compared to
S$3.3 million in FY14, resulting in a gross profit margin of 24.2%, an improvement from
the gross profit margin of 14.5% in FY14. The improved margin performance was due to
higher revenue, ongoing cost control measures and productivity enhancements across
the business segments.
In terms of profitability, the Group turned around a loss of S$9.9 million in FY14 to a
net profit of S$6.6 million in FY15 due to the improved performance of the Group’s
continuing operations which yielded revenue increases and higher gross profit margins.
Gains registered in the discontinued operations of the US subsidiaries and our reduced
administrative expenses (as a result of, amongst others, a favourable foreign exchange
position), further contributed to our bottom-line.
The Group’s earnings per share (diluted) based on the weighted average number of
ordinary shares for the continuing operations was 1.09 cents (loss of 0.16 cents in FY14)
while net asset value stood at 12.79 cents per share in FY15 (11.25 cents per share in
FY14).
Our balance sheet reflected our positive performance with a working capital of
S$32.3 million as at 30 June 2015 (30 June 2014: S$28.0 million). We recorded positive
cash flow from operations of S$4.6 million with cash and cash equivalents of S$12.4
million as at the end of FY15. Historical records demonstrate that the Company’s
granting of trade credits had been respectable and healthy; we maintained receivables
balance with trade receivables of S$6.2 million. No bad debts provision was made as
the Company has historically maintained a good track record in terms of its collection of
receivables. The Group maintained a low gearing ratio of 0.037 times.
RESILIENCEINDIFFICULTIES,REBOUNDINGONOPPORTUNITIES
We have succeeded in stemming the tide of losses with the rationalisation of our loss-
making US subsidiaries, which constituted the Imaging Equipment and Energy Efficient
Products business segment, during the last quarter of FY15. The liquidation of Aplegen,
Khor Thiam Beng
Chairman
Lim Eng Hong
Chief Executive Officer
04
AVI-TECH ELECTRONICS LIMITED
| ANNUAL REPORT 2015
