Quarterly Results

Quarterly Report For The Financial Period Ended 31 March 2018

Financials Archive
Financial Statement (187 KB)

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Condensed Consolidated Statement Of Profit Or Loss And Other Comprehensive Income For The Financial period Ended 31 March 2018



Condensed Consolidated Statement Of Financial Position As At 31 March 2018



Condensed Consolidated Statement Of Cash Flow For the financial period ended 31 March 2018

Review of Performance
CURRENT QUARTER (FY2018-Q4 vs FY2017-Q4)

The Group's revenue increased by 11% to RM27.70 million due to higher contribution from both hire purchase and furniture segment. The Group's profit before tax increased by 32% to RM10.80 million mainly due to higher profit contribution from the hire purchase segment.

Hire purchase receivables registered a 15% growth year on year from RM338.23 million to RM387.28 million as at 31 March 2018. This was the key factor that led to the increase in hire puchase revenue for the current financial period.

Total borrowings increased by 127% 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 11% to RM19.33 million, mainly due to increase in hire purchase portfolio.

Other income increased by 109% to RM0.76 million mainly due to additional income received from short term funds.

Impairment allowance decreased by 20% to RM4.38 million. Credit loss charge (i.e. impairment allowance over average net hire purchase receivables) decreased from 1.56% to 1.10%. Excluding the collective impairment allowance, the credit loss charge for the quarter decreased from 1.46% to 0.99%. 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 17% to RM4.61 million mainly due to higher staff costs attributed to the recruitment of a larger workforce and higher staff development expenses. As a result of higher borrowings, the finance cost increased by 129% to RM0.66 million.

The profit before tax increased by 29% to RM10.38 million mainly due to increase in hire purchase portfolio and lower impairment allowance for the quarter ended 31 March 2018.

Furniture Segment

Revenue increased by 12% to RM8.37 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. Gross profit margin increased from 36% to 38%.

Other expenses increased by 7% to RM2.62 million mainly due to higher operating expenses which is in tandem with the higher sales.

The Division recorded a profit before tax of RM0.39 million for the quarter ended 31 March 2018.

YEAR-TO-DATE (FY2018 vs FY2017)

The Group's revenue increased 10% to RM104.13 million, mainly due to higher contribution from hire purchase business.

The Group's profit before tax increased 16% to RM35.34 million, contributed by the hire purchase division.

Hire Purchase Segment

Revenue increased by 12% from RM65.43 million to RM73.08 million, mainly due to increase in hire purchase portfolio.

Impairment allowance increased marginally by 2% to RM20.47 million mainly due to higher cost of debt recoveries. Despite the slight increased in impairment allowance, the credit loss charge decreased from 6.32% to 5.45%. Excluding the collective impairment allowance, the credit loss charge for the financial year would be 5.12%, a decrease from 5.82%. The improvement was mainly due to a stable economic environment during financial year under review and coupled with the Group's concerted efforts in credit recovery.

Other expenses increased by 9% to RM17.18 million mainly due to higher staff costs attributed to the recruitment of a larger workforce and higher staff development expenses, which is in line with the larger hire purchase portfolio.

As a result of higher borrowings, the finance cost increased by 137% to RM2.33 million.

The profit before tax for the 12-month period increased by 15% from RM30.22 million to RM34.89 million, riding on the increase in hire purchase portfolio and the Group's concerted efforts in credit recovery.

Furniture Segment

Despite a 49% decrease in export sales amounting to RM2.95 million, the total furniture revenue increased by 7% to RM31.05 million which is in line with the Group's effort to focus its operations in the domestic market. Gross profit margin increased from 35% to 37%.

Impairment allowance increased by approximately RM0.23 million to RM0.27 million, mainly due to slower payment from furniture dealers. Other expenses increased by 9% to RM10.55 million mainly due to higher operating expenses which is in tandem with the higher sales.

The Division recorded a profit before tax of approximately RM0.40 million for the 12-month period ended 31 March 2018.

Comparison of Results with Preceding Quarter

The Group's profit before tax for the current quarter of RM10.80 million was higher as compared to RM9.54 million of the immediate preceding quarter mainly due to higher profit contribution from the hire purchase segment

Prospects and Outlook

As a result of the recent change in political landscape in Malaysia, the economic policies to be adopted by the new government will have an impact to the business operating environment

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 second hand car hire purchase financing, which strategically operates in the underserved 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 could be affected by the potential change of the GST policies.

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.