financials information

Half Year Results Financial Statement And Related Announcement

Condensed interim consolidated statement of profit or loss and other comprehensive income

N.M.: Not meaningful

Condensed interim statements of financial position

Review of Performance

Review of Income Statement

Revenue

The Group recorded approximately S$0.74 million from food and beverage ("F&B") revenue for HY FY24, an increase of S$0.16 million compared to HY FY23.

The increase in F&B revenue from Singapore of S$0.27 million in HY FY24 was mainly due to the higher revenue generated in current period from the Group's The Green Bar ("TGB") and Superfood Kitchen outlets. The decrease in F&B revenue from Thailand of S$0.11 million was due the cessation of Mulligan's operation effective 30 April 2023.

Other operating income

Increase in other operating income by S$0.12 million was mainly due to (i) a one-off write-off of payables of S$0.15 million in HY FY24 following final settlement with a creditor; and (ii) net foreign exchange gain of S$0.02 million. This was however partially offset by a decrease in government grants, interest income and rental rebate received totalling to S$0.05 million.

Costs & expenses

Inventories and consumables used increased by S$0.05 million to S$0.23 million in HY FY24 which is in tandem with the increase in the Group's revenue.

Employee benefits increased by S$0.04 million to S$0.69 million in HY FY24 mainly due to additional employee salaries and benefits arising from increase in operational activities in Superfood Kitchen outlets.

Lease expenses increased by S$0.06 million to S$0.11 million in HY FY24 is mainly attributable to the recognition of short-term leases of Superfood Kitchen outlets for the full 6-month period in HY FY24, as compared to 4-5 months of leases in HY FY23, as well as 1 month's lease expense contributed by AFA following the acquisition.

Legal and professional fees increased by S$0.15 million to S$0.30 million in HY FY24 due to professional fees incurred for, inter alia, legal, valuation and due diligence performed for the acquisition of AIM and AFA, which was completed in HY FY24.

As a result of the factors mentioned above, the Group recorded an increase in total expenses of S$0.28 million to S$1.74 million in HY FY24.

Loss before income tax

Overall, the Group recorded a loss of S$0.82 million in HY FY24 which is comparable to the loss recorded in HY FY23 for the reasons stated above.

Review of Statement of Financial Position

Current assets

The Group's current assets increased by S$1.70 million to S$2.80 million as at 31 January 2024, from S$1.10 million as at 31 July 2023. The increase in trade and other receivables of S$2.07 million mainly arose from the consolidation of AFA, which became a wholly-owned subsidiary of the Group following the completion of acquisition on 29 December 2023. However, this was partially offset by the decrease in cash and cash equivalent of S$0.37 million which has been utilised for working capital purposes including, inter alia, payment of professional fees and payroll related expenses.

Non-current assets

Non-current assets increased by S$0.33 million to S$1.03 million as at 31 January 2024, from S$0.70 million as at 31 July 2023. The increase is mainly attributed to the net increase of S$0.29 million right-of-use assets arising from lease renewal of TGB outlet and the investment in associated company, AIM, of S$0.13 million following the completion of acquisition on 29 December 2023. The increase is partially offset by the decrease in property, plant and equipment of S$0.09 million.

Current liabilities

The Group's current liabilities increased by S$0.89 million to S$1.81 million as at 31 January 2024, from S$0.92 million as at 31 July 2023 mainly due to (i) increase in payables resulting from the Auspac acquisition; and (ii) increase in lease liabilities arising from lease renewal of TGB outlet.

Non-current liabilities

This relates to the non-current portion of the lease liabilities on both TGB and SFK. The increase in lease liabilities of S$0.14 million is arising from lease renewal of TGB outlet.

Equity

Equity attributable to owners of the Company amounted to S$2.02 million as at 31 January 2024, increased by S$1.13 million from S$0.89 million as at 31 July 2023. The increase was mainly due to (i) the issuance of shares as partial consideration for the acquisition of Auspac of S$0.76 million; (ii) effect of acquiring a wholly-owned subsidiary, AFA, during the period of S$1.06 million; and (iii) increase in foreign currency translation reserve of S$0.02 million. This was partially offset by a decrease due to a net loss attributable to owners of the Company of S$0.70 million recognised in HY FY24.

Review of Statement of Cash Flows

The Group's net cash flows generated from operating activities in HY FY24 was S$0.03 million, mainly due to net operating cash outflow before changes in working capital of S$0.66 million and net working capital inflow of S$0.69 million.

The net cash flows used in investing activities in HY FY24 was S$0.26 million, mainly due to the acquisition of AFA and AIM.

The net cash flows used in financing activities in HY FY24 was S$0.14 million, mainly for the repayment of lease liabilities.

As a result, cash and cash equivalents stood at S$0.28 million as at 31 January 2024.

Commentary

F&B Business in Singapore
The Group experienced an increase in revenue during the HY FY24 as compared to HY FY23, due mainly to gain in brand awareness from the marketing initiatives by the Group. However, due to intense competition, increasing labour and higher operational costs in Singapore, the operating environment will remain challenging to the Group. The Group is mindful of the rising costs for operating our outlets and will intensify our efforts to manage outlets' expenses while constantly conceiving new and compelling menu that will appeal to customers. Even though Singapore and the rest of the world are recovering from the COVID-19 pandemic, global economics uncertainties remain due to ongoing geopolitical tensions, and potential recession following tightening by central banks around the world to combat inflationary pressure, may dampened consumer confidence and business sentiments. The Group will continue to exercise due care and diligence in cost management and utilisation of resources, and its effort to optimize its business operations amidst this challenging time.

Fund management business in Singapore and corporate finance advisory business in Australia
The Company has been on a search for new business opportunities to enhance shareholders' value in the long-term and has acquired AIM and AFA as part of its ongoing strategy to diversify into other businesses. The Company has on 29 December 2023 completed the acquisition of AFA and AIM.

Singapore's asset management industry has become a global hub for investors and managers and is central to the local financial services industry. Despite the challenging market environment, Singapore's net inflow of funds in 2022 held relatively steady, similar to the net inflows in 2021, at S$435 billion. Singapore saw continued interest from global and regional asset managers seeking to establish offices here to tap regional opportunities. The number of licensed and registered fund management companies in Singapore increased from 1,108 as at December 2021 to 1,194 as at December 2022. Interest from global asset managers and sophisticated asset owners seeking to set up an office in Singapore remains strong, given the asset management eco-system. Monetary Authority of Singapore ("MAS") will continue to intermediate international capital flows to support Asia's growth and net-zero transitional financing needs⁽¹⁾.

Given the strong track record of enabling listings and capital raisings on the Australia Securities Exchange ("ASX"), even in a challenging global macroeconomic environment, ASX continues to be an attractive destination for both domestic and foreign companies seeking to access Australia's substantial and growing superannuation fund pool, which now boasts an impressive A$3.5 trillion in investable assets, according to the Australian Prudential Regulation Authority. This growth in assets will continue to support demand for IPOs as market conditions become more favourable. Notwithstanding continuing macroeconomic and geopolitical risks, the current listings pipeline points to an increase in ASX IPO activity in 2024⁽²⁾.

The Group is of the view that foray into the fund management business in Singapore (via AIM) and corporate finance advisory business in Australia (via AFA) intended for the Group's sustainable growth in the long term, require time and resources to build.

Notes

1. Extracted from Singapore Asset Management Survey 2022 issued by MAS (https://www.mas.gov.sg/-/media/mas/news-and-publications/surveys/asset-management/asset-management-survey-report-2022_version-finalised.pdf).
2. Extracted from ASX capital markets: 2023 year in review and 2024 outlook (https://www.asx.com.au/blog/listed-at-asx/asx-capital-markets-2023-year-in-review-and-2024-outlook).