epicentre quarterly report dec 2012

7/28/2019 Epicentre Quarterly Report Dec 2012

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Epicentre Holdings Limited(Company Registration No. 200202930G)

Half Year Financial Statement and Dividend Announcement For The Period Ended 31

December 2012

1(a)(i) An Income statement and statement of comprehensive income, or a statement of comprehensive

income, for the group, together with a comparative statement for the corresponding period of the

immediately preceding financial year.

Consolidated Statement of Comprehensive Income

Group

1H 1H Increase /

(Decrease)

FY 2013 FY 2012

S$'000 S$'000 %

Revenue 88,973 92,556 -3.9%

Cost of sales (78,620) (80,514) -2.4%

Gross Profit 10,353 12,042 -14.0%

Other operating income 1,064 1,175 -9.4%

Interest income - 4 n/m

Administrative expenses (9,475) (9,025) 5.0%

Selling and distribution cost (2,298) (2,861) -19.6%

Finance costs (41) - n/m

(Loss) / Profit before income tax (397) 1,335 -129.7%

Income tax (132) (302) 56.2%

(Loss)/ Profit for the financial year (529) 1,033 -151.2%


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Other comprehensive income:

Foreign currency differences on translation of

foreign operations

(35) 77 -145.5%

Income tax relating to components of other

comprehensive income

- - -

Other comprehensive income for the year, net of

tax

(35) 77 -145.5%

Total comprehensive income for the financial year (564) 1,110 -150.8%

(Loss)/Profit attributable to:

Owners of the parent (411) 1,176 -134.9%

Non-controlling interest (118) (143) -17.5%(529) 1,033 -151.2%

Total comprehensive income attributable to :-

Owners of the parent (450) 1,237 -136.4%

Non-controlling interest (114) (127) -10.2%

(564) 1,110 -150.8%

1(a)(ii) Notes to the Consolidated Statement of Comprehensive Income

Group

1H 1H Increase

FY 2013 FY 2012 (Decrease)

` S$'000 S$'000 %

Profit for the financial year includes

the following:

Interest income - (4) n/m

Depreciation of plant and equipment 835 618 35%

Amortisation of club membership 56 - n/m

Staff cost 4,629 5,006 -8%

Gain on disposal of plant and

equipment

(1) - n/m

Plant and equipment written off - 1 n/m

Net foreign exchange (gain) (246) (204) 21%


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Inventories written off 17 66 -74%

1b(i) A consolidated statement of financial position (for the issuer and group), together with a

comparative statement as at the end of the immediately preceding financial year.

Consolidated Statements of Financial Position

Group Company

31 Dec 2012 30-Jun-12 31 Dec 2012 30-Jun-12

S$'000 S$'000 S$'000 S$'000

Non-current assetsPlant and equipment 3,087 3,606 696 732

Club membership 167 223 167 223

Investments in subsidiaries - - 3,476 3,476

3,254 3,829 4,339 4,431

Current assets

Inventories 14,443 14,124 - -

Trade and other receivables 7,388 7,363 3,383 3,557

Prepayments 860 880 100 77

Income tax recoverable 11 103 11 -

Cash and cash equivalents 10,909 12,953 110 279

33,611 35,423 3,604 3,913

Less:

Current liabilities

Trade and other payables 19,742 18,182 297 459

Provisions 252 252 50 50

Derivative financial instruments 21 21 - -

Finance lease payable 42 79 42 79

Current income tax payable 115 153 - -

Bank borrowings 781 3,490 - -

20,953 22,177 389 588

Net current assets 12,658 13,246 3,215 3,325

Less:

Non-current liabilities

Finance lease payable 82 82 82 82

Deferred tax liabilities 92 92 15 15

Bank borrowings 84 87 - -

258 261 97 97

Net assets 15,654 16,814 7,457 7,659


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Equity

Share capital 6,709 6,709 6,709 6,709

Treasury shares (42) (7) (42) (7)

Foreign currency translation account (63) (24) - -Retained earnings 9,261 10,233 790 957

Equity attributable to owners of the

parent

15,865 16,911 7,457 7,659

Non-controlling interest (211) (97) - -

Total equity 15,654 16,814 7,457 7,659

1b(ii) Aggregate amount of group's borrowings and debt securities

Amount repayable in one year or less, or on demand

31-Dec-12 30-Jun-12

S$'000 S$'000

Secured 42 79

Unsecured 781 3,490

Total 823 3,569

Amount repayable after one year

Secured 82 82

Unsecured 84 87

Total 166 169

Total borrowings 989 3,738

Details of collaterals

The bank loans are secured by corporate guarantees.

The finance lease obligations of the Group are secured by the rights to the leased motor vehicles.


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1(c) A consolidated statement of cash flow (for the group), together with a comparative statement for

the corresponding period of the immediately preceding f inancial year.

Consolidated statement of cash flows

1H FY 2013

S$'000

1H FY 2012

S$'000

Operating activities :

(Loss)/Profit for the financial period (397) 1,335

Adjustments for :

Changes in value of derivative financial instruments - (45)

Depreciation of plant and equipment 835 618

Amortisation of club membership 56 -

Interest income - (4)

Interest expense 41 -

Gain on disposal of plant and equipment (1) -

Inventories written off 17 66

Plant and equipment written off - 1

Operating cash flows before working capital changes 551 1,971

Changes in working capital

Inventories (310) (574)

Trade and other receivables (8) (3,835)

Prepayments 20 (269)

Trade and other payables 1,485 1,574

Cash generated from/(absorbed by) operations 1,738 (1,133)

Interest received - 4Interest paid (41) -

Income taxes paid (80) (419)

Net cash from/(used in) operating activities 1,617 (1,548)

Investing activities

Purchase of plant and equipment (316) (1,006)

Purchase of treasury shares (35) -

Contribution by non-controlling interest in subsidiary - 244

Net cash used in investing activities (351) (762)

Financing activities

Dividend paid (561) (3,740)

Repayment of finance lease payables (37) (35)

Proceeds from bank borrowings - 1,497

Repayments of bank borrowings (2,712) -

Net cash used in financing activities (3,310) (2,278)


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Net change in cash and cash equivalents (2,044) (4,588)

Cash and cash equivalents at beginning of financial period 12,953 14,870

Effects of exchange rate changes on cash and cash equivalents - 61

Cash and cash equivalents at end of financial period 10,909 10,343


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1(d)(i) A statement (for the issuer and group) showing either (i) all changes in equity or (ii) changes in

equity other than those arising from capitalisation issues and distributions to shareholders, together

with a comparative statement for the corresponding period of the immediately preceding financial

year.

Statements Of Changes In Equity

Foreign Equity

currency attributable

Group Share Treasury Retained translation to owners

of the

Non-

controlling

Total

capital shares earnings account Parent interest equity

S$'000 S$'000 S$'000 S$'000 S$'000 S$'000 S$'000

Balance at 1 July

2012

6,709 (7) 10,233 (24) 16,911 (97) 16,814

Profit for the

financial period

- - (411) - (411) (118) (529)

Other

comprehensive

income for the

financial year:

Foreign currency

differences on

translation of foreign

operations

- - - (39) (39) 4 (35)

Total comprehensive

income for the

financial year

- - (411) (39) (450) (114) (564)

Purchase of treasury

shares

- (35) - - (35) - (35)

Distributions to

owners of the parent

Dividends - - (561) - (561) - (561)

Balance at 31 Dec

2012

6,709 (42) 9,261 (63) 15,865 (211) 15,654

Balance at 1 July

2011

6,709 - 12,989 (2) 19,696 36 19,732

Profit for the

financial year

- - 1,176 - 1,176 (143) 1,033


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Other

comprehensive

income for the

financial year:Foreign currency

differences on

translation of foreign

operations

- - - 61 61 16 77

Total comprehensive

income for the

financial year

- - 1,176 61 1,237 127 1,110

Distributions to

owners of the parent

Dividends - - (3,740) - (3,740) - (3,740)

Transactions with

non-controlling

interest

Subscription of new

shares by non-

controlling interest

- - - - - 228 228

Balance at 31 Dec

2011

6,709 - 10,425 59 17,193 137 17,330

Share Treasury Retained

Company Capital shares earnings TotalS$'000 S$'000 S$'000 S$'000

Balance at 1 July

2012

6,709 (7) 957 7,659

Profit for the financial

year

- - 394 394

Total comprehensive

income for the

financial year

- - 394 394

Purchase of treasury

shares

- (35) - (35)

Distributions to

owners :

Dividends - - (561) (561)

Balance at 31 Dec

2012

6,709 (42) 790 7,457


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Balance at 1 July

2011

6,709 - 4,474 11,183

Profit for the financialyear

- - 164 164

Total comprehensive

income for the

financial year

- - 164 164

Distributions to

owners

Dividends - - (3,740) (3,740)

Balance at 31 Dec

2011

6,709 - 898 7,607

1(d)(ii) Details of any changes in the company's share capital arising from rights issue, bonus issue,

share buy-backs, exercise of share options or warrants, conversion of other issues of equity securities,

issue of shares for cash or as consideration for acquisition or for any other purpose since the end of the

previous period reported on. State also the number of shares that may be issued on conversion of all

the outstanding convertibles, as well as the number of shares held as treasury shares, if any, against the

total number of issued shares excluding treasury shares of the issuer, as at the end of the current

financial period reported on and as at the end of the corresponding period of the immediately

preceding financial year.

31 Dec 2012 30 Jun 2012

No. of shares at beginning of period 93,481,600 93,501,600

Less : Treasury shares (100,000) (20,000)

No. of shares at end of period 93,381,600 93,481,600

1(d)(iii) To show the total number of issued shares excluding treasury shares as at the end of the current

financial period and as at the end of the immediately preceding year.

31 Dec 2012 30 Jun 2012

Total number of issued shares 93,501,600 93,501,600

Total number of treasury shares (120,000) (20,000)

Total number of issued shares

(excluding treasury shares)

93,381,600 93,481,600

1(d)(iv) A statement showing all sales, transfers, disposal, cancellation and/or use of treasury shares as

at the end of the current financial period reported on.

31 Dec 2012 30 Jun 2012

No. of treasury shares at beginning of period 20,000 -

Additions during the period 100,000 20,000

No. of treasury shares at end of period 120,000 20,000


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2) Whether the figures have been audited or reviewed and in accordance with which auditing standards

or practice.

The figures have not been audited or reviewed by the Company's auditors.

3) Where the figures have been audited or reviewed, the auditors' report (including any qualifications

or emphasis of matter)

Not applicable.

4) Whether the same accounting policies and methods of computation as in the issuer's most recent

audited financial statements have been applied

Save as disclosed in paragraph 5 below, the accounting policies and methods of computation applied by

the Group are consistent with those used in its most recently audited financial statements for the

financial year ended 30 June 2012.

5) If there are any changes in the accounting policies and methods of computation, including any

required by an accounting standard, what has changed, as well as the reasons for, and the effect of the

change

On 1 July 2012, the Group adopted the new and revised Financial Reporting Standards ("FRS") and

interpretation of FRS ("INT FRS") that are relevant to its operations and are effective in the financial year

ending 30 June 2013. The adoption of these new and revised FRS and INT FRS where relevant has no

material impact on the Group's accounting policies or the financial statements for the current financial

year.

6) Earnings per ordinary share of the group for the current period reported on and the corresponding

period of the immediately preceding financial year, after deducting any provision for preference

dividends.

Group

1H 1H

FY

2013

FY

2012

Earnings per ordinary share attributable to owners of the parent during thefinancial period / year:

(a) Based on weighted average number of ordinary shares in issue (cents) (0.44) 1.26

(b) On a fully diluted basis (cents) (0.44) 1.26


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7) Net asset value (for the issuer and group) per ordinary share based on the total number of issued

shares excluding treasury shares of the issuer at the end of the:-

(a) current period reported on; and

(b) immediately preceding financial year

Group Company

31 Dec

2012

30 Jun

2012

31 Dec

2012

30 Jun

2012

Net tangible asset backing per ordinary share based on existing

issued share capital as at the end of the period reported on

(cents)

23.23 24.76 10.93 11.10

Net asset value backing per ordinary share based on existing

issued share capital as at the end of the period reported on

existing issued share capital as at the end of the period reported

on (cents)

23.49 25.09 11.18 11.43

8) A review of the performance of the group, to the extent necessary for a reasonable understanding of

the group's business. It must include a discussion of the following:-

(a) any significant factors that affected the turnover, costs, and earnings of the group for the current

financial period reported on, including (where applicable) seasonal or cyclical factors; and

(b) any material factors that affected the cash flow, working capital, assets or liabilities of the group

during the current financial period reported on.

Revenue

Revenue decreased by 3.9% to S$89 million compared to S$92.6 million in the corresponding preceding

period. Revenue contribution by geographical location is as follows:

Revenue

1H FY 2013 1H FY 2012 Increase / (Decrease)

S$'000 S$'000 S$'000

Singapore 74,226 75,253 (1,027) 1.4%

Malaysia 14,307 16,866 (2,559) 15.2%

PRC 440 437 3 0.7%


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Revenue from Singapore experienced a slight reduction of approximately 1.4% while revenue from

Malaysia experienced a decrease of 15.2% due more conservative buying behavior by the consumers as a

result of uncertainty in the macro-economic conditions. Inventory constraints for certain new product

models that was launched in 1H FY2013 also limited our revenue growth. Revenue from the PRC also did

not meet the Groups expectations as a result of challenging market conditions.

Gross Profit

Gross profit decreased from S$12.0 million in 1H FY2012 to S$10.4 million in 1H FY2013. Gross profit

margin declined from 13.0% in 1H FY2012 to 11.6% in 1H FY2013. The decline was due to lower margin

contributed by Apple branded products. Apple Branded products contributed to approximately 87% of

our Group revenue in 1H FY2013. The aggressive promotional bundle created to promote our sales also

had a negative impact on our profit margin.

Other Operating Income

Other operating income decreased from S$1.2 million in 1H FY 2012 to S$1.0 million in 1H FY2013. The

decrease was mainly due to a fall in sponsorship income from vendors.

Administrative Expenses

Administrative expenses increase by approximately S$450,000 in 1H FY2013 as compared to 1H FY2012.

The increase is mainly due to the following reasons:-

(1) Increase in our rental expenses of approximately S$919,000 as a result of an increase in the number of

outlets from 14 outlets in 1H FY2012 to 19 outlets in 1H FY2013. In 1H FY2012, 3 outlets commenced

operations during the period under review. As such, the rental expenses for these outlets were not

captured in all six months of 1H FY2012. However, in 1H FY2013, the rental expenses for these 3 outlets

plus the 4 out of 5 additional outlets that commenced operations in the 2012 had contributed to the

rental expenses for the full 1H FY2013.

(2) Increase in depreciation of approximately S$217,000 as a result of the opening of 4 additional

Epicentre outlets, of which 2 were in the PRC, 1 in Singapore and Malaysia respectively. A new Epilife

outlet that was opened in March 2012 also contributed to the increase in depreciation charges in 1H

FY2013 as compared to 1H FY2012.

The increase in rental expenses and depreciation is offset by a reduction in staff cost of approximately

S$377,000, resulted from our continuous efforts of controlling staff cost.The Group has also embarked invarious cost-cutting measures in 1H FY2013. These cost cutting measures has successfully brought the

cost for travelling and business development as well as other miscellaneous expenses down by

approximately S$300,000.

Selling and Distribution Cost

The selling and distribution expenses decreased by approximately S$600,000 or 19.6%, from

approximately S$2.9 million in 1H FY2012 to approximately S$2.3 million in 1H FY2013. This is due to the

success in managing our advertising and promotion expenses in 1H FY2013.


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Finance Cost

Finance cost relates to interest expenses from bank borrowings for Shanghai operations and for working

capital.

Arising from the above, loss before income tax was S$0.4 million in 1H FY2013 compared to profit before

tax of S$1.3 million in 1H FY2012. The reduction in profitability is primarily attributable to the operating

losses from our PRC entity resulting from low revenue and an increase in operating expenses in the PRC

subsidiary.

Tax expense was calculated according to the statutory tax rates of the respective countries in which the

Group operates. Tax expense relates to income tax paid in advance for the current year of assessment for

Malaysia subsidiary adjusting for non-deductible expenses.

Consolidated statement of financial position review

Non-current assets decreased from S$3.8 million as at 30 Jun 2012 to S$3.3 million as at 31 Dec 2012.

This is mainly due to the capital expenditure incurred for our new outlet in Malaysia that commence

operations in July 2013. This was offset by the depreciation charges and amortization of club

membership.

Current assets decreased by approximately S$1.8 million, from S$35.4 million as at 30 Jun 2012 to S$33.6

million as at 31 Dec 2012. The decrease in current assets is mainly attributable to the reduction in cash

and cash equivalents of approximately S$2.0 million, from S$13.0 million as at 30 Jun 2012 to

approximately S$11.0 million as at 31 Dec 2012.

Current liabilities also decreased by approximately S$1.2 million, from S$22.1 million as at 30 June 2012

to S$20.9 million as at 31 Dec 2012. Trade and other payables increased by approximately S$1.6 million

or 8.6%, from S$18.2 million as at 30 Jun 2012 to S$19.8 million as at 31 Dec 2012. This is mainly

attributable to the additional purchases made as a result of the opening of our new outlets during the 1H

FY2013 as compared to 1H FY2012. The increase in trade and other payables is offset by a reduction in

short-term bank borrowings of approximately S$2.7 million, resulting from the repayment of these short-

term bank borrowings in 1H FY2013.

Arising from above, working capital decreased by approximately S$588,000 to approximately S$12.7

million.

Cash Flow

Cashflows from operating activities was an inflow of approximately S$1.6 million for 1H FY2013 as

compared to an outflow of approximately S$1.5 million for 1H FY2012. This was primarily due to the

increase in trade and other payables.

Net cash outflow from investing activities amounted to approximately S$0.3 million for 1H FY2013

resulting from the renovation and fi ttings of our new outlets during the year.

Net cash outflow from financing activities amounted to approximately S$3.3 million, resulting from

dividend payment amounting to approximately S$600,000 and repayment of bank borrowings amounting

to approximately S$2.7 million.


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9) Where a forecast, or a prospect statement, has been previously disclosed to shareholders, any

variance between it and the actual results.

Not applicable.

10) A commentary at the date of the announcement of the significant trends and competitive

conditions of the industry in which the group operates and any known factors or events that may affect

the group in the next reporting period and the next 12 months.

The Group expects business conditions to remain challenging, amidst uncertainties in the major

economies. However, the Group remains focused to widen its distribution network in existing markets.

The Group will continue to enhance its operational efficiency and monitor its operating expenses in the

face of higher cost environment.

11) Dividend

(a) Current Financial Period Reported On

Any dividend declared for the current financial period reported on?

No dividend has been declared for the 6 months ended 31 December 2012.

(b) Corresponding Period of the Immediately Preceding Financial Year

Any dividend declared for the corresponding period of the immediately preceding financial year?

Name of Dividend: Final Dividend

Dividend Type: Cash

Dividend amount per share: S$0.006

Tax Rate: Tax exempt (one-tier)

(c) Date Payable

Not applicable

(d) Books closure date

Not applicable

12) If no dividend has been declared/recommended, a statement to that effect.

No dividend has been declared for the 6 months ended 31 December 2012.


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13) If the Group has obtained a general mandate from shareholders for Interested Person

Transactions (IPT), the aggregate value of such transactions as required under Rule

920(1)(a)(ii). If no IPT mandate has been obtained, a statement to that effect.

The Company does not have a shareholders mandate under Rule 920 of the Listing Manual

Section B: Rules of Catalist of the Singapore Exchange Securities Trading Limited.

14) Negative Assurance Confirmation on Interim Financial Result Pursuant to Rule 705 (5) of the

Listing Manual

We, the undersigned, hereby confirm to the best of our knowledge, nothing has come to the

attention of the Board of Directors of the Company which may render the unaudited interim

financial results for the half year ended 31 December 2012 to be false or misleading in any

material aspect.

On behalf of the Board of Directors

Jimmy Fong Teck Loon Brenda Yeo

Executive Chairman & CEO Executive Director

By order of the Board

Jimmy Fong Teck Loon

Chief Executive Officer

8 February 2013

This announcement has been reviewed by the Company's Sponsor, RHT Capital Pte. Ltd., for compliance

with the relevant rules of the Singapore Exchange Securities Trading Limited (SGX-ST). The Company's

Sponsor has not independently verified the contents of this announcement.

This announcement has not been examined or approved by the SGX-ST and the SGX-ST assumes no

responsibility for the contents of this announcement including the correctness of any of the statements or

opinions made or reports contained in this announcement.

The contact person for the Sponsor is:-

Name: Mr Wong Chee Meng Lawrence, Registered Professional, RHT Capital Pte. Ltd.

Address: Six Battery Road #10-01, Singapore 049909

Tel: 6381 6998

epicentre quarterly report dec 2012

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