Khor Thiam Beng
Chairman
Lim Eng Hong
Chief Executive Officer
DEAR SHAREHOLDERS
We are pleased to present to you our annual report for the
financial year ended 30 June 2016 (“FY16”). The Group
succeeded in delivering another year of profitability. This
marks eight consecutive quarters of profitability since
our turnaround in the financial year ended 30 June 2015
(“FY15”). Our sound financial performance was attributable
to our unwavering focus on increasing profitability,
containing costs and enhancing productivity. This singular
focus resulted in our Burn-In Services and Engineering
Services business segments achieving revenue gains with
our Burn-In Board Manufacturing and PCBA Services
business segment continuing to contribute positively to
the growth of the Group and our Group enjoying a surge in
profit from continuing operations.
Our achievement is all themore significant given the difficult
economic conditions in Singapore and globally. For 2015,
Singapore’s economy grew by 2.0% as compared with 3.3%
in 2014. The plunge in oil prices, volatile stock market and
slowing economic growth in China and in the developed
economies had a negative impact on the domestic front.
Despite the external factors weighing down on us, we
have leveraged on the opportunities presented to us, used
our competencies to great advantage and succeeded in
keeping on a growth trajectory.
GROUP FINANCIAL REVIEW
The Group achieved revenue of S$33.9 million, a 19.5%
increase over revenue of S$28.4 million in FY15. The
higher revenue was attributed to improved revenues from
the Burn-In Services and Engineering Services business
segments. Revenuecontributions fromSingaporeoperations
continued to lead, accounting for 53.8% of Group revenue,
followed by the US at 21.5% and the other regions making
up the rest.
The Group’s improved revenue, coupled with ongoing cost
control and productivity enhancement measures, positively
impacted gross profit and gross profit margin. Gross profit
grew by 59.2% to S$11.0 million over FY15’s gross profit of
S$6.9 million. Gross profit margin, likewise, improved to
32.3% from 24.2% in FY15.
We registered a 5.0% marginal decrease in net profit
of S$6.2 million as compared to S$6.6 million in FY15
on account of no further gains being registered in the
discontinued operations of the US subsidiaries as well as
foreign exchange rates contributing to higher administrative
expenses. Nevertheless, excluding discontinued operations,
profit from continuing operations increased by 71.4% to
S$6.4 million from S$3.7 million in FY15.
Earnings per share (diluted) based on the weighted average
number of ordinary shares for the continuing operations
was 3.72 cents (2.17 cents in FY15) with net asset value at
26.50 cents per share in FY16 (25.58 cents per share in FY15).
1
On our balance sheet, we continued to maintain a robust
position with working capital of S$30.9 million as at 30 June
2016 (30 June 2015: S$32.3 million). The Group generated
net cash from operations of S$8.0 million in FY16 from higher
profit generated fromthecontinuingoperations as compared
to the previous year. Our cash and cash equivalents as at the
end of FY16 was S$6.5 million. Our trade receivables balance
stood at S$7.2 million with no bad debt provision made due
to the fact that historically, we have a good record in trade
credits being honoured.
It is notable that our financial achievements have been given
external validation when we were listed as one of the two best
performing semiconductor stocks in 2016 in an SGX Market
Update.
2
GETTING BACK ON TRACK; DELIVERING
ON PROFITABILITY AND GROWTH
A key focus for the Group in the year under review was to
exit the Singapore Exchange Securities Trading Limited (the
“SGX-ST”) Watch-List in accordance with Rule 1314 of the
ListingManual. Pursuant to this goal, with the discontinuance
of operations of our loss-making subsidiaries, we steadily
kept on an ascending path of profitability. In line with the
financial criteria under Rule 1314 for removal from the
SGX-ST Financial Watch-List, we applied to the SGX-ST and
were given in-principle approval for removal from the SGX-
ST Financial Watch-List with effect from 16 September 2016.
04
AVI-TECH ELECTRONICS LIMITED
ANNUAL REPORT 2016
LETTER TO
SHAREHOLDERS
