Third Quarter Results Financial Statement And Related Announcement
Statement of Comprehensive Income
Review of Performance
The Group achieved a revenue of S$0.9 million for Q3 FY2018, which saw an increase of S$0.7 million over the corresponding quarter of last financial year. The increase was mainly derived from the revenue contributed to new transactions of e-Holidays Co., Ltd which approximately 73% 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 23% comparing corresponding period of last financial year mainly due to the increase of tourists spending and better business conditions during Songkran festival during the period. The outlet is continuously exploring and rolling out marketing and promotion activities to enhance sales transactions. The F&B industry is very competitive with the management working collectively to maintain the business performance and activities for the outlet concept.
Miscellaneous income of S$0.02 million recorded in Q3 FY2018 mainly derived from the employment grant from the government authority and corporate tax refund from the completion of voluntary strike off of a subsidiary.
Cost & Expenses
Inventories and services expenses saw an increase of S$0.6 million to S$0.67 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$0.05 million mainly due to an increase in advertising activities and promotion from the higher revenues and operations activities. Employee benefits increased to S$0.57 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 Q3 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 for the interest payment to financial institution.
The Group saw rental on operating lease increased by 45% to S$0.08 million mainly due to increase in rental expenses for the operations facilities in Q3 FY2018. Transportation expenses amounting to S$0.01 million in the reported quarter mainly incurred for the expanded business and operating outlets. Legal and professional fees saw an increase of S$0.07 million to S$0.14 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 Q3 FY2018 saw an increase of S$0.04 million to S$0.08 million mainly incurred for related expenses to the corporate structure, processing and lodgment fee of the right issues exercise incurred in the reported quarter.
Total expenses in Q3 FY2018 saw an increase of S$1.15 million to S$1.6 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$0.69 million in Q3 FY2018 as compared an operating loss of S$0.26 million in Q3 FY2017.
Statement of Financial Position and Statement of Cash Flows
The Group's current assets held as at 30 April 2018 was S$4.24 million. Non-current assets stated at S$0.59 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 related to the issuance of the travel agency licence. Fixed assets comprising property, plant & equipment amounted to S$0.2 million as at 30 April 2018 after taking into account of amortization and depreciation in Q3 FY2018.
Trade and other receivables increased to about S$ 0.47 million due to an increase in other receivables for the reported quarter. Other current assets which include security deposit, advances and prepayment increased to S$0.58 million mainly due to the higher activities and expanded business transactions. Inventory amount saw a decrease to S$0.01 million as at 30 April 2018 being due to better control on stock holding and management for the reported period.
Trade and other payables increased to S$0.59 million as at 30 April 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 30 April 2018.
There is an existing bank facility of S$0.05 million taken up mainly attributed to the travel business. Such loan granted is to facilitate the business activities of the related business segment. Part of the loan is repayable within the next financial year.
Net cash used in operating activities of S$1.25 million mainly due to operating loss and the movement in working capital in Q3 FY2018. There are no cash flows from investment activities in the reported quarter. The cashflow used in financing activities amounting to S$3.79 million in Q3 FY2018 was mainly due to the proceeds from the rights issue of shares. Cash and cash equivalents stood at S$3.17 million as at 30 April 2018.
Total equity for the Group as at 30 April 2018 was $4.19 million 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 this industry and will continue to explore business opportunities including fund raising exercise to position and transform its business profile and strategic direction.
On 28 March 2018, the Board announced the completion of a renounceable non-underwritten rights issue new ordinary shares in the capital of the Company, where 262,635,534 rights share were allotted and issued. Net proceeds of S$3.94 million were raised from the rights issue and the total number of shares after the rights issue in the capital of the Company increased to 456,655,522 accordingly.
With the mandate of the business diversifications, the Company is in process of diversifying into the fintech and travel businesses to attain business feasibilities. The Group will provide any update on the development of these business operations accordingly.