In the financial year ending 31 March 2017, I am pleased to inform shareholders that we have achieved profitability amidst the uncertain business landscape and challenging business environment.
In FY2017, we have successfully disposed of our Australian subsidiary and ceased operations in Australian markets. Despite the efforts, the Australian subsidiary has not performed to expectations and incurred losses for the past few years. With the disposal, we will focus on the businesses in South East Asia.
We have also made a convertible loan of S$2million to Hong Kong, for potential collaboration and partnership opportunities in PR China. We hope to be able to leverage on the strengths of both parties to expand into the consumer markets in China via the numerous stores in the airports and train stations that our potential partner operates.
Over the past financial year, our businesses in South East Asia has experienced more challenges, as the consumer spending seemed to be weaker as compared to prior years. This could be due to the uncertainties encountered generally by most businesses across the region. While we are able to achieve higher revenue, the gross profit margins have declined due to competition as well as the product mix of the revenue achieved. We will continue to seek growth through the introduction of new, innovative products and increase market penetration.
We continue to be prudent in our cash management, keeping a close watch over our inventories and receivables. This prudent approach has enabled us to be able to generate positive operating cash flow, and allowed the company to continue to reward shareholders with dividends.
The IT distribution industry has seen many changes and we expect the changes to continue. While this may be challenging, it may also present opportunities for us if we are able to maintain a strong balance sheet for new business opportunities. We will continue to be prudent in the South-East Asia markets and at the same time, explore opportunities in PR China, where online sales are common amongst the consumers. The online platforms in PR China will present an opportunity to tap the vast consumer market over there.
We believe that there will be many opportunities in the Asian region and despite the uncertainties, we hope to leverage on the vast network of our suppliers and our business partners to seek out new growth prospects.
The board has recommended a dividend payout of 1.0 cent per share, which is similar to our payout in FY2016, subject to shareholders’ approval at the AGM. This will make it the 12th consecutive year of paying dividends to our shareholders, as an appreciation of the support shown by our shareholders.
The cumulative dividends payout would be 14.2 cents from 2005. The 1 cent dividend payout represents a yield of 5.1% based on the share price of S$0.196.
Corporate Social Responsibility
The company believed in contributing to the society and being a responsible member in promoting corporate social activities within the company. In FY2017, we participated in annual charity run and carnival organised by TOUCH Young Arrows, assisted to raise funds for the underprivileged. We organized visit to All Saints Home-Tampines, where volunteers played games and celebrated the moon cake festival the residents. In November 2017, our staff even joined in the blood donation drive at the blood bank@Dhoby Ghaut. On regular basis, we continue to collaborate with Touch Home Care on the Meals on Wheels program and delivered to the old and frail. Through these activities, we are glad to see our staff ’s active participation and we certainly hope to inculcate these values in our corporate culture.
On behalf of the Board, I would like to extend our sincere appreciation to all our stakeholders. I would like to thank our shareholders whom have been supportive of us, and our consistent dividend payout is our appreciation of your support. I would also like to thank our principals/suppliers and loyal customers, for growing with us. I am appreciative of the support from bankers, our professional partners and business associates. And of course, many thanks you to the dedicated and loyal Ban Leong Team, whom have overcome the challenges in FY2017 and contributed to the profitability of the Group.