Quarterly Report For The Financial Period Ended 30 June 2018
Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Financial period Ended 30 June 2018
Condensed Consolidated Statement Of Financial Position As At 30 June 2018
Condensed Consolidated Statement Of Cash Flow For the financial period ended 30 June 2018
Review of Performance
CURRENT QUARTER (FY2019-Q1 vs FY2018-Q1)
The Group's revenue increased by 13% to RM28.82 million due to higher contribution from both hire purchase and furniture segment. The Group's profit before tax increased by 55% to RM10.72 million mainly due to increase in hire purchase portfolio and significantly lower impairment allowance for the quarter ended 30 June 2018.
Hire purchase receivables recorded a 18% growth year on year from RM349.56 million to RM412.80 million as at 30 June 2018. This was the key factor that led to the increase in hire puchase revenue for the current financial period.
Total borrowings increased by 63% mainly due to higher drawdown of block discounting payables during the current financial period to support the increased hire purchase receivables.
Hire Purchase Segment
Revenue increased by 13% to RM19.97 million, mainly due to increase in hire purchase portfolio.
Other income increased by 162% to RM0.54 million mainly due to an additional income received from short term funds.
Impairment allowance decreased by 41% to RM3.84 million. Credit loss charge (i.e. impairment allowance over average net hire purchase receivables) decreased from 1.79% to 0.92%. The improvement was mainly due to a stable economic environment during financial period under review and coupled with the Group's concerted efforts in credit recovery.
Other expenses increased by 34% to RM5.26 million mainly due to higher staff costs attributed to the recruitment of a larger workforce. As a result of higher borrowings, the finance cost increased by 37% to RM0.73 million.
The profit before tax increased by 54% to RM10.56 million mainly due to increase in hire purchase portfolio and lower impairment allowance for the quarter ended 30 June 2018.
Revenue increased by 12% to RM8.86 million mainly due to the increase of local sales, which is in line with the Group's effort to focus its operations in the domestic market.
Other expenses increased by 15% to RM2.99 million mainly due to higher operating expenses which is in tandem with the higher sales.
The Division recorded a profit before tax of RM0.16 million mainly due to higher revenue and lower impairment allowance for the quarter ended 30 June 2018 .
Comparison of Results with Preceding Quarter
The Group's profit before tax for the current quarter of RM10.72 million was slightly lower as compared to RM10.80 million of the immediate preceding quarter mainly due to lower profit contribution from furniture segment in current quarter.
Prospects and Outlook
Despite the uncertain economic conditions ahead,the overall macro-economic factors (i.e.labour market conditions, inflation outlook, cost of living ) and general public sentiments remain positive.In view of this, the Group intends to maintain its momentum in growing its hire purchase portfolio in the financial year ending 31 March 2019 without compromising on the quality of its assets.
The Group will focus on its core business of secondhand car hire purchase financing, which strategically operates in the under served niche market, and continue to remain prudent in managing its credit risks.
The furniture business will continue to focus its operations in the domestic market. However,the short term sales and profit margin could be affected by the imminent introduction of the Sales and Services Tax .
In conclusion, the Board is confident that the Group's performance for the financial year ending 31 March 2019 is expected to be better than financial year ended 31 March 2018.