Financials

Full Year Financial Statement Announcement For The Year Ended 31 March 2010

Financials Archive

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Profit & Loss

Review Of Performance

(A) Commentary on The Statement Of Comprehensive Income Of The Group

1. Revenue
   Revenue decreased by $3.1 million or 4.3% from $72.1 million in FY2009 to $69.0 million in FY2010. The decrease in turnover was a result of the global economic recession affecting mainly the first half of the financial year.
   
   The Group would have suffered a greater decline in revenue if Yangtzekiang Industries Sdn Bhd ("YISB"), a subsidiary acquired by Travelite Holdings Ltd in late March 2009, had not made a revenue contribution of $7.1 million for FY2010.
   
   
2. Gross Profit
   The gross profit margin remained fairly constant at 44.0% in FY2010 as compared to 43.7% in FY2009. The overall decrease of the gross profit by $1.1 million was a result of drop in turnover of $3.1 million.
   
   
3. Other Credits
   The other credits of $0.3 million were mainly due to foreign exchange gains. The previous financial year's credits of $0.4 million were due to negative goodwill on acquisition of YISB of $0.2 million and gain on disposal of fixed assets of $0.2 million.
   
   
4. Distribution Costs
   The increase in distribution costs of $1.3 million was mainly accounted by YISB with $2.4 million, the new subsidiary acquired in late March 2009, and offset by a cost reduction of $1.1 million mainly in rental and staff related costs.
   
   
5. Administrative Expenses
   The decrease in administrative expenses of $0.1 million was mainly due to a decrease in credit card commission and staff related costs of $0.3 million, offset by an increase of $0.2 million accounted by YISB.
   
   
6. Other Charges
   The other charges of $2.3 million were mainly due to the impairment of goodwill and other intangible assets of $1.1 million and allowance for impairment of inventory of $0.6 million. Kindly refer to the Notes on Statement of Comprehensive Income on page 2 for further information.
   
   
7. Income Tax Expense
   The decrease in income tax expense was in line with lower Group's taxable profit.
   
   
8. Loss before tax from continuing operations
   The Group's loss of $2.5 million was mainly affected by the performance of Fashion Street (S) Pte Ltd ("FS").
   
   FS's revenue had decreased by $4.8 million or 42.5% from $11.3 million in FY2009 to $6.5 million in FY2010. Accordingly, its gross profit had eroded from $5.6 million in FY2009 to $2.9 million in FY2010. This decrease was mainly due to intense competition and global economic recession.
   
   Given the present slowdown situation in its retail sales, FS had made an allowance for impairment on its inventories of $0.5 million in the current year. It has also written off its plant and equipment of $0.3 million.
   
   In additions to the above write down, FS incurred rental and employee benefits expense of $2.6 million and $1.7 million respectively. As a result, FS registered a loss before tax of $3.3 million in FY2010, as compared to $827,000 loss in FY2009.
   
   The Group has also fully impaired its goodwill and other intangible assets of $1.0 million arising from the acquisition of FS. Excluding the impairment of goodwill, other intangible assets, plant and equipment and inventory, the Group's loss before tax would be $0.7 million.
   
   

(B) Commentary on The Consolidated Statements Of Financial Position and Statement Of Cash Flows

1. The decrease in intangible assets of $1.2 million was mainly due to impairment of goodwill and other intangibles assets.
2. Investment in associate refers to the Group's 45% interest in Beijing U-Sibei Trading Co., Ltd. (北京优思贝商贸有限公司) in People's Republic of China.
3. The increase of $0.3 million in inventories was a result of more departmental store counters and boutiques opened by FW and YISB in FY2010.
4. The increase of $1.5 million in trade and other receivables was mainly due to higher sales volume towards the end of financial year.
5. The increase of $6.6 million in other financial liabilities (current and non-current) was mainly due to the additional bridging loans of $9.0 million and higher utilisation of bill payables and bank overdraft of $2.4 million, offset by the repayment of term loans and bridging loans of $4.8 million.
6. As at 31 March 2010, the Group's cash and cash equivalents increased by $2.8 million to $5.9 million, an adequate level maintained for its ongoing operations.

Commentary On Current Year Prospects

In view of the improving general consumer confidence and passenger air travel, both locally and globally in the recent quarters, the Management is of the view that the travel and menswear segments will recover in FY2011. However, stiff competition and fixed distribution costs will continue to plague the ladies' fashion segment as we mainly sell through specialty stores.

Going forward, the Group will maintain cautious outlook for FY2011 and will continue to seek opportunities to expand its overseas distribution channels and source for new exclusive brands to represent.

Balance Sheet