Second Quarter Results Financial Statement And Related Announcement
Statement of Comprehensive Income
Review of Performance
The Group achieved a revenue of S$0.92 million for Q2 FY2018, which saw an increase of S$0.69 million over the corresponding quarter of last financial year. The increase was mainly derived from the new transactions of e-Holidays Co., Ltd which contributed about 72% of the group revenues. The group is also working on various travel services network and promotion to maintain the business transactions and operations of the travel segment. The sales activities from F&B at Mulligans Pattaya saw an increase of about 11% comparing to corresponding period of last financial year mainly due to the increase of tourists spending and better business conditions during the year-end festivals at the vicinity. The outlet is continuously exploring and rolling out marketing and promotion activities to enhance sales transactions. The F&B industry is still very competitive with the management and operations working collectively to maintain the business performance and activities for the outlet concept.
Miscellaneous income of about S$0.01 million was recorded in Q2 FY2018 mainly derived from the employment grant from the government authority. No miscellaneous income was recorded in Q2 FY2017.
Cost & Expenses
Inventories and services expenses saw an increase of S$0.52 million to S$0.61 million. The increase in cost was mainly contributed by higher sales activities from travel services and higher sales from the F&B outlet in the reported quarter. Advertising, media and entertainment expenses increased to S$0.04 million mainly due to increase in advertising activities and promotion from the higher revenues and operations activities. Employee benefits increased to S$0.53 million mainly due to additional staff deployment and new setup entities for the business operations in the reported quarter. Amortisation and depreciation charges increased to S$0.01 million in Q2 FY2018 due to higher depreciation charges for the business entities incurred for the period. Finance cost increased to less than S$0.01 million in the reported quarter mainly due to the interest payment to financial institution.
The Group saw rental on operating lease decreased by 4% to S$0.07 million mainly due to a decrease in rental expenses for the operations facilities in Q2 FY2018. Transportation expenses amounting to S$0.01 million in the reported quarter was mainly incurred for the expanded business and operating outlets. Legal and professional fees saw an increase of 23% to S$0.09 million mainly due to related professional and legal fees incurred for the new business transactions and activities in the related quarter. Other operating expenses in Q2 FY2018 saw an increase of 32% to S$0.7 million mainly incurred for related expenses to the corporate structure and new business entities.
Total expenses in Q2 FY2018 saw an increase of S$0.92 million to S$1.44 million mainly due to the increase in operating cost and related employee expenses. The increase in expenses is directly contributed from the increase in business setups and transactions in the reported quarter. With the prevalent sales activities and higher cost structure in the reported quarter, the Group registered a higher operating loss of S$0.51 million in Q2 FY2018 as compared to an operating loss of S$0.28 million in Q2 FY2017.
Statement of Financial Position and Statement of Cash Flows
The group's current assets held as at 31 January 2018 was S$1.35 million. Non-current assets amounted to S$0.58 million mainly due to the inclusion of the goodwill of S$0.22 million from the acquisition of the e-Holidays Co., Ltd, and the deposit of S$0.17 million in relation to the issuance of the travel agency licence. Fixed assets comprising property, plant & equipment amounted to S$0.19 million as at 31 January 2018 after taking into account the amortization and depreciation in Q2 FY2018.
Trade and other receivables decreased to about S$ 0.06 million with consistent effort from credit collection and control for the reported quarter. Other current assets which include security deposit, advances and prepayment increased to S$0.66 million mainly due to the higher activities and expanded business transactions. Inventory amount saw a decrease to lesser than S$0.01 million as at 31 January 2018 mainly due to better control on stock holding and management for the reported period.
Trade and other payables increased to S$0.81 million as at 31 January 2018 mainly due to the expanded business structure and activities. Trade and other payables include trade suppliers' payables, advance receipts from customers, payable to contractors, provisions and accruals as at Q2 FY2018.
There is an existing bank facility amounting to S$0.06 million which is attributable to the acquired travel business. The loan was granted to facilitate the business activities of the related business segment. S$0.04 million of the loan is payable within the current year and the balance of S$0.02 in the pursuing years.
The Group generated negative net cashflow from operating activities of S$0.77 million mainly due to operating loss and the movement in working capital in Q2 FY2018. Cash flows used in investing activities of less than S$0.01 million in Q2 FY2018 was mainly incurred for the operating equipment for the business and the exchange translation of the related entities. The cashflow used in financing activities amounted to S$0.01 million in Q2 FY2018 mainly due to the repayment of bank facilities. Cash and cash equivalents stood at S$0.63 million as at 31 January 2018.
The Group is in a positive equity position of S$1.06 million as at 31 January 2018 as compared to S$2.1 million as at 31 July 2017.
The Group continues to remain cautious about the outlook and condition of the overall business environment. The Board is mindful of the intense competition of the related industry and will continue to explore business opportunities including fund raising exercise to position and transform its business profile and strategic direction.
As per announcements dated 18 December 2017 and 30 January 2018 on the proposed rights issue and approval by shareholders in the EGM respectively, the Company is currently in process of the renounceable non-underwritten rights issue of up to 388,039,976 new ordinary shares in the issue and paid-up capital of the Company at an issue price of S$0.015 for each rights share, on the basis of two rights share for every one existing ordinary shares in the issued share capital of the Company.
With the mandate of the business diversifications, the Company is in process of streamlining the fintech and travel businesses to attain business feasibilities and operation activities of these related segments.
The Group will update on further developments on this matter accordingly.