Financial Statements And Related Announcement - Full Yearly Results
Consolidated Income Statement
Consolidated Statement of Comprehensive Income
Review of Group Performance
For 4Q2016, the Group's revenue increased by 77.4% to S$72.8 million as compared with revenue for 4Q2015 as a result of increase in contribution from the Residential property and Hospitality and commercial segment. During the quarter, a couple of sizeable Hospitality and commercial projects were completed as compared with 4Q2015.
The gross margin decreased from 26.3% in 4Q2015 to 22.9% for 4Q2016, as a result of lower margins recorded in projects completed during the quarter.
Marketing and distribution expenses increased from S$1.3 million in 4Q2015 to S$2.1 million in 4Q2016, mainly due to increase in staff costs and showroom expenses.
General and administrative expenses increased from S$2.8 million in 4Q2015 to S$3.1 million in 4Q2016. The increase was mainly due to higher foreign exchange loss, offset by the decrease in staff cost.
As a result, the Group achieved higher profit before tax of S$11.6 million for 4Q2016, an increase of 73.1% as compared with S$6.7 million for 4Q2015. After taking into account tax expenses, the Group's net profit after tax was S$9.3 million for 4Q2016.
The Group's revenue for FY2016 increased by 7.2% to S$179.0 million as compared with the revenue for FY2015. The increase was a result of increase in contribution from Hospitality and commercial segment, offset by the decrease from Residential property segment.
The gross margin increased from 20.7% in FY2015 to 22.3% for FY2016, as a result of higher margins recorded in projects completed during the financial year.
For FY2016, marketing and distribution expenses increased by 27.4% to S$6.1 million as compared with S$4.8 million in FY2015, mainly due to increase in staff cost.
General and administrative expenses decreased from S$10.3 million in FY2015 to S$8.9 million in FY2016. The decrease was mainly due to exchange gain in FY2016 as compared with an exchange loss in FY2015, reduction in staff cost and the increase in professional fees.
As a result, the Group achieved a higher profit before tax of S$25.3 million for FY2016, as compared with S$19.8 million for FY2015. After taking into account the tax expenses, the Group's net profit after tax was S$20.5 million for FY2016.
Balance Sheet (31 December 2016 vs 31 December 2015)
Property, plant and equipment decreased by S$3.5 million mainly due to depreciation charges, offset by the purchase of equipment and construction-in-progress during the period.
Inventories decreased by S$0.4 million to S$13.3 million as a result of inventories written down during the year.
Contracts work-in-progress decreased by S$0.4 million to S$5.2 million as at 31 December 2016. The decrease was due to work in progress being more promptly certified by client as at 31 December 2016.
Non-current trade receivables increased by S$0.7 million to S$14.8 million as at 31 December 2016 due to movement of retention sums.
Total current trade receivables increased to S$66.2 million as at 31 December 2016 as compared with S$32.6 million as at 31 December 2015. The increase was in line with the increase in revenue in 4Q2016 as compared with 4Q2015.
Other receivables and deposits increased by S$3.0 million to S$6.8 million. The increase was mainly due to deposits made to suppliers and subcontractors for new projects.
Trade payables increased by S$12.9 million to S$27.6 million. The increase was in line with the increase in revenue in 4Q2016 as compared with 4Q2015.
Accrued operating expense increased by S$16.2 million to S$38.2 million as at 31 December 2016 as compared with S$22.0 million as at 31 December 2015 mainly due to project-related accruals and bonus provision.
4Q2016 vs 4Q2015
For 4Q2016, there was net cash inflow of S$11.1 million, mainly from operating activities.
FY2016 vs FY2015
For FY2016, there was net cash outflow of S$0.4 million. The cash inflow is mainly due to cash flow generated from operating activities, offset by the payment of dividends during the financial year.
The Group secured 47 new projects worth S$209.2 million in FY2016, bringing our order book to S$193.1 million as at 31 December 2016.
We expect the operating environment in the key markets in which we operate to remain challenging in FY2017 despite our healthy order book.
We are cautiously optimistic about the outlook and expect to maintain its momentum in securing projects. Looking into FY2017, the Group continues to see opportunity and prospect in Singapore and Malaysia, underpinned by a thriving tourism and hospitality sector that continues to increase demand for hotel accommodation. This demand is expected to fuel the fit-out industry through the refurbishment of existing hotels and build-out of new assets.
We will continue to focus on costs and operational productivity to strengthen our competitiveness and sustainability. We remain cognizant that our reputation is key to new business opportunities, and will seek to enhance our relationships with new and existing clients in our various markets of operation.
Barring any unforeseen circumstances, Design Studio Group remains well-positioned to engage current volatile market conditions, with an order book of S$193.1 million, a strong balance sheet and a healthy cash position of S$54.0 million as at 31 December 2016.