32
ANNUAL REPORT 2016
FINANCIAL PERFORMANCE
The Group’s revenue for the financial year ended on 30 June 2016 decreased by RM29.9
million or 4.3% to RM665.4 million as compared to the preceding year. The tough operating
environment after the implementation of GST couple with weakened consumer sentiments
have caused the revenue dropped by 4.3%.
The Group reported a profit before tax (PBT) of RM45.94 million, which is 36.8% lower than
the PBT of RM72.71 million reported in the preceding year. Earnings weakened drastically
as GP margin were affected due to promotional activities and higher discount given to drive
sales. The drop in gross margin also attributable to the increase in the merchandise costs
due to weakened Ringgit couple, with the absorption of GST cost in view of the weakened
consumer sentiments. A lower PBT also attributable to impairment losses arising from fair value
adjustments on investment property and property, plant and equipment amounting to RM2.66
million and RM1.23 million respectively. In addition, there are impairment losses of trade
receivables of RM1.37 million and write off of inventories of RM0.08 million respectively.
Excluding these impairment losses and write off, the Group would have recorded a PBT of
RM51.28 million.
CORPORATE DEVELOPMENTS
In line with our growth strategy, Bonia Group strives to explore potential business opportunities
to create wealth for our shareholders.
On 29 January 2016, Jeco (Pte) Limited (70% owned subsidiary of Bonia, “JPL”) entered into a
Sale and Purchase Agreement with Helgo Neugebauer (“HNB”) in respect of JPL’s acquisition
of 100 ordinary shares representing 100% of the equity interest in IBB Pte Ltd (“IBB”) from
HNB. IBB’s principal activity is general wholesale trade (including general importers and
exporters) with the business of supplying leatherwear and other fashion products for sale to
Indonesia. The acquisition will enable JPL to expand its marketing and distribution networks
to Indonesia by providing a better control and more comprehensive support to the Indonesia
local dealers in terms of merchandising, advertising and marketing activities.
In April 2016, Bonia announced the incorporations of PT Jeco Investment Indonesia (“PTJII”)
and PT CRI Mitra Sejati (“PTCMS”) in Indonesia. PTJII was incorporated with its intended
business activity to engage in the investment of real estate in Indonesia, whereas PTCMS was
incorporated for the purpose of engaging in the field of wholesale of footwear, watches, bags
and wallets in Indonesia.
CRR Vietnam Co., Ltd (“CRR”) emerged as an indirect subsidiary of Bonia in July 2016. The
intended business activities of CRR is to engage in management consultancy activities and
to implement the right of import, distribution, wholesale of goods in the territory of Vietnam.
As part of the Group’s rationalisation plan to eliminating unnecessary administrative costs in
maintaining dormant subsidiaries, GuangZhou Jia Li Bao Leather Fashion Co Ltd (“GJLB”), an
inactive company incorporated in the People’s Republic of China was dissolved in FY2016.
Apart from it, the Company also disposed its entire equity interest in Mcolour & Design Sdn
Bhd, a dormant subsidiary previously involved in product design, research and development.
CHAIRMAN’S STATEMENT
UTILISATION OF PROCEEDS RAISED
FROM CORPORATE PROPOSALS
There were no fund raising exercises
implemented during the FY2016.
MATERIAL CONTRACTS
During the FY2016, there were no material
contracts (not being contracts entered into
in the ordinary course of business) entered
into by the Company and its subsidiaries
involving Directors’ and major shareholders’
interests.
FUTURE PROSPECTS
The greatest challenge in 2016 for the
retail industry in Malaysia is still consumer
spending. After one year of implementing
the GST, Malaysian consumers are still
holding back on spending and we believe
that consumers will remain cautious on their
discretionary spending moving forward. Any
further increase in cost of living in the near
future will worsen the retail industry.
Nevertheless, the Group would also continue
to explore new business opportunities in
particularly oversea markets. Meanwhile,
we continue to undertake prudent measures
to monitor our operating cost and remain
selective on store openings.
Barring any unforeseen circumstances, the
Board of Directors remains cautious about
the Group’s outlook for the coming financial
year. We expect to face further challenges
in view of the volatile global environment,
sluggish domestic economic conditions
compounded by weak Ringgit, low
commodities prices and overall consumer
sentiment is expected to continuously impact
the retail industry.
