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9
Annual Report 2013 LifeBrandz Ltd
Our continuous
efforts to
streamline and
rationalise our
operations over
the last two years
has borne fruit.
to the after-tax loss of S$4.4 million
in the previous fnancial year.
In addition to better cost
management, the Group’s improved
performance during the year in the
face of increasing competition in the
entertainment industry and escalating
operations costs could also be
attributed to our strategic acquisition
of the business and assets of
Qumulus Pte Ltd, a company providing
marketing and management services
for night entertainment clubs.
The acquisition, which was funded
by the allotment of 300 million new
ordinary shares to Qumulus,
was completed on 30 April 2013.
The acquisition of Qumulus was
revenue accretive. As part of the
terms of the acquisition, the existing
collaboration agreement between
Qumulus and Stereolounge Pte Ltd
in respect of managing and operating
the lounge and club, Mink and Royal
Room respectively would be novated
to the Group. As a result, the Group
was able to recognise the revenue
that Qumulus had previously been
receiving for the management and
marketing services it had been
providing for the lounge and club.
The new revenue stream has enhanced
our cash fow and proftability.
Another critical beneft of the
acquisition was that it enabled the
Group to acquire Qumulus’s proven
business expertise in marketing and
management of night entertainment
establishments and extensive
customer database. The night
lifestyle and entertainment industry
is competitive and dynamic. In the
last few years, many local and foreign
players entered the industry bringing
with them new concepts and brands.
On the other hand, customers raised
their expectations for more diverse
entertainment concepts. In this
challenging landscape, our extensive
marketing and management expertise
and wide customer base would give us
the competitive edge to surge ahead
towards sustainable growth.
In addition, the lifestyle and
entertainment tastes and preferences
of our sophisticated, well-informed
and widely-travelled customers are
also changing rapidly. In order to
keep up with the changes, the Group
regularly revamp and refresh our
concepts and offerings. During the
year, the group introduced two new
dance clubs to capture a greater
share of specifc market segments.
Dream, a hip electronic dance music
club, located in the former Zirca
premises, was launched in March
2013 and was successful in attracting
many new and younger revellers.
Fenix Room, an exclusive club lounge,
opened its doors in June 2013 to
sophisticated club goers. It adopted
the “members club” concept where
membership was reserved to a select
group of discerning and affuent
clubbing afcionados. Thus far, Fenix
Room is undoubtedly a huge success
with a capacity crowd on most
weekend nights.
Going forward, the operating
environment will remain challenging.
The competition will become stiffer.
With the tight labour market,
operating costs will continue to
exert pressure on our margins.
Nevertheless, we have a wealth of
experience and expertise to negotiate
the challenges ahead and to forge
a path to continued growth. The
acquisition of Qumulus has enabled
the Group to leverage the knowledge
and experience of our new partners.
We will be introducing a few more new
concepts in the coming year. Barring
any unforeseen circumstances that
may adversely affect our business, we
are cautiously optimistic that we will
improve our performance in FY2014.
We would also like to thank the
members of the Board of Directors
for their invaluable guidance and
contributions during the year. In
particular, we would like to express
our heartfelt appreciation to our
Founder and Executive Chairman,
Mr Clement Lee, who left the Group
in April 2013. We are indebted to the
sacrifces and contributions he made
to grow the Group to what it is today.
In closing, I will like to share that I will
be stepping down as Chief Executive
Offcer from December 2013 and
assuming a Non Executive Director
position within the Board. I will be
returning to MediaCorp where I was
previously from. My duties will be
assumed by Mr Cedric Chong, our
current Executive Director who was
appointed in May this year. Mr Chong
has a proven track record with running
successful clubs and bars, and the
Board is confdent the Group will be
in very good hands.
Last, but not least, we would like
to thank all our customers for their
generous patronage, our shareholders
for their patience and understanding,
and the management and staff for
their unfagging support and efforts
in driving LifeBrandz forward to
proftability in the last year.
Bernard Lim MIANG
Chief Executive Offcer