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Quarterly Reports

Quarterly Report For The Financial Period Ended 30 September 2018

Financials Archive

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Unaudited Interim Financial Report For The Quarter Ended 30 September 2018
Condensed Consolidated Statement Of Financial Position

Condensed Consolidated Statement Of Financial Position

Unaudited Interim Financial Report For The Quarter Ended 30 September 2018
Condensed Consolidated Statement Of Comprehensive Income

Condensed Consolidated Statement Of Comprehensive Income

Performance Review

Table 1: Financial review for current financial period vs corresponding last financial period

Condensed Consolidated Statement Of Financial Position

Continuing Operations

For the current quarter under review, the Group had reclassified sales trade margin from total revenue to cost of sales ("COS") amounting to RM12.46 million due to the adoption of the MFRS15 ("reclassification"), which was previously netted against revenue. Without the said reclassification, the reported total revenue would have been RM86.72 million as compared to RM100.36 million recorded in the previous year corresponding quarter. The revenue decrease by RM13.63 million or 13.6% as compared to last year same quarter mainly attributable to weak retail sentiment in both domestic and overseas market.

The Profit before tax ("PBT") decreased by 43.6% to RM2.12 million mainly due to the lower revenue achieved and additional provision for impairment loss on trade receivables amounting to RM0.78 million.

Retailing

Malaysia(Local Market)

The revenue contributed by domestic market decreased by 7.9% to RM51.37 million (without the reclassification) as compared to the previous year corresponding quarter which reported a revenue of RM55.78 million. The decline was mainly due to weak retail sentiment in the domestic market and closing of a number of the non-performing outlets.

The operating profit for the current quarter reported an increase of 6.6% to RM3.92 million as compared to the previous year corresponding quarter of RM3.68 million mainly due to the reduction in operating expenses and favourable result from its consolidation process and closing of certain non-performing outlets.

Overseas Market

The revenue for overall overseas market declined by 20.0% to RM34.91 million (without the reclassification) as compared to the previous year corresponding quarter of RM43.67 million. The sales volume from overseas market dropped significantly, particularly for Indonesia where its revenue dropped by 35.5% to RM4.90 million as a result of its rationalisation process to reduce contribution from consignment counters and focus on boutique operations to build a better brand image. For the export segment, revenue dropped by 35.8% to RM2.74 million due to the lower demand from Kuwait, Cambodia and Myanmar.

The significant decrease in the revenue had resulted an operating loss of RM0.84 million as compared to the previous year corresponding quarter which recorded a profit of RM1.08 million.

Manufacturing

Revenue decreased by 59.1% to RM0.18 million as compared to the previous year corresponding quarter of RM0.43 million mainly due to low spending sentiment in the domestic market.

The operating loss increased by RM0.07 million to RM0.12 million as compared to the corresponding quarter of RM0.05 million due to lower revenue achieved.

Investment and property development

Revenue that derived mainly from rented investment properties decreased by RM0.22 million as compared to the corresponding quarter due to lower tenancy rate.

An improvement of the operating loss by RM0.10 million to RM0.18 million as compared to the corresponding quarter of RM0.28 million was due to the reduction in operating expenses.

Discontinued Operations

Revenue increased by 5.4% to RM19.53 million (without the reclassification) as compared to the previous year corresponding quarter of RM18.53 million. The increase was mainly due to favourable result from aggressive promotional activities carried out in the domestic market.

The operating profit for the current quarter increased by RM1.34 million to RM0.60 million as compared to corresponding quarter of operating loss of RM0.74 million due to the increase in revenue as well as reduction in operating expenses.

Table 2: Financial review for current quarter compared with immediate preceding quarter

Condensed Consolidated Statement Of Financial Position

Continuing Operations

The Group's revenue from continuing operations for the current quarter decreased by 21.6% to RM86.72 million (without the reclassification) as compared to the RM110.66 million recorded in the preceding quarter. The significant decrease was mainly due to higher sales recorded during the Hari Raya festive season in the preceding quarter.

The Group's PBT decreased by 61.7% to RM2.12 million as compared to RM5.54 million in the preceding quarter mainly due to the lower revenue achieved and additional provision for impairment loss on trade receivables of RM0.78 million.

Discontinued Operations

The revenue from discontinuing operations for the current quarter decreased by 48.1% to RM19.53 million (without the reclassification) as compared to the preceding quarter of RM37.66 million. The significant decrease was mainly due to higher sales recorded during the Hari Raya festive season in the preceding quarter.

As a result of the lower revenue achieved, the PBT declined by 93.5% to RM0.31 million as compared to the preceding quarter of RM4.81 million. In addition, there was a recognition of gain on fair value adjustment on the investment properties amounting to RM3.0 million in the preceding quarter.

Prospect

The retail customer has become increasingly more sophisticated. The marketplace has become more difficult, with traditional retailers being challenged by online and omnichannel retailers. The customer is spoilt for choice. The weaker regional currencies will impact costs, but tourists will find our quality products to be of great value. Indirect taxes will continue to affect customer spending patterns. The looming trade war between two super powers will create opportunities in our region, as manufacturers shift production and create jobs and wealth in our region. Malaysia's GDP is forecast to grow further, led by a substantial increase in domestic consumption.

Given this expected scenario, we find our future prospects to be excitingly challenging. In the remaining year, we shall focus on prudent cost management, both at production and operational levels, while investing further in product design, market research, marketing, new platforms and our people. Our new organization structure, organized by brands, will make the Group more focused on customers from the different target groups.

Moving forward with the demerger of the CRG Group, our focus will be on growing Bonia, Braun Buffel, Sembonia and our licensed brands. We expect to further increase our business in Indonesia while expanding into new Middle East states. With these initiatives, we hope to be able to maintain our performance for the remaining year.


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