Elektromotive Group Limited

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    Half Year Financial Statement And Dividend Announcement

    BackSep 16, 2002

    Key points

    1. Turnover at S$4.1m
    2. Loss after tax at S$1.56m
    3. Loss per share at 0.7 cents
    4. Since the half year end:
    - Successful acquisition of education business, Auston Technology Group ("ATG")
    - Intention to list ATG's subsidiary, Auston, on SGX
    - Acquisition further strengthens group balance sheet : net cash now S$3.5m

    Strategy

    1. To develop Panpac into a diversified communications and knowledge-based products and services group in Asia within the next three years.
    2. Core businesses in publishing, education and marketing communications:
    - Organic growth in existing publishing business through the launch of new titles and geographic expansion
    - Further expansion of the education business through the recently acquired ATG
    - Expansion of marketing communications service offerings - recently obtained approval to operate in the China market

    Ricky Ang, Managing Director of Panpac, said:

    "During the first half, revenues were hit by weaker advertising sales. The second half is expected to hold more promise as we anticipate bigger contributions from our magazine publishing business due to the seasonal nature of our business, and in line with economic growth. Also, we are looking forward to contributions from Auston Technology Group, which we acquired earlier this month as part of our growth plans."

    "We have a clear strategy to build Panpac into a diversified communications and knowledge-based group across Asia over the next three years. Given the size of the Singapore market, we must regionalise our business, developing our presence in other markets including China. We see significant opportunities in diversifying and strengthening our earnings base within the three core businesses we have identified."

    Enquiries:

    Panpac Media.Com Limited Tel: +65 6292 0300
    Lee Kau Fu Email: lee.kaufu@panpacmedia.com

    Gavin Anderson & Company Tel: +65 6339 9110
    Richard Barton Email: rbarton@gavinanderson.com.sg
    Terence Foo Email: tfoo@gavinanderson.com.sg


    Financial statements for the period ended 30 June 2002.

    These figures have not been audited.


    - -
    Group
    Company
    - -
    S$'000
    %
    S$'000
    %
    - -
    - -
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    1.(a) Turnover
    4,052
    7,105
    (43)
    0
    20
    NM
    1.(b) Cost of sales or classification as followed in the most recent audited annual financial statements
    (3,937)
    (6,426)
    (39)
    0
    0
    NM
    1.(c) Gross profit/loss
    115
    679
    (83)
    0
    20
    NM
    1.(d) Investment income
    0
    0
    NM
    0
    0
    NM
    1.(e) Other income including interest income
    63
    654
    (90)
    47
    20
    135
    2.(a) Operating profit/(loss) before income tax, minority interests, extraordinary items, interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items
    (1,548)
    1,046
    NM
    (141)
    340
    NM
    2.(b)(i) Interest on borrowings
    (43)
    (84)
    (49)
    (30)
    (29)
    3
    2.(b)(ii) Depreciation and amortisation
    (532)
    (854)
    (38)
    (242)
    (255)
    (5)
    2.(b)(iii) Foreign exchange gain/(loss)
    0
    0
    NM
    0
    0
    NM
    2.(c) Exceptional items (provide separate disclosure of items)
    612
    0
    NM
    0
    0
    NM
    - -
    - -
    S$'000
    %
    S$'000
    %
    - -
    - -
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    2.(d) Operating profit/(loss) before income tax, minority interests and extraordinary items but after interest on borrowings, depreciation and amortisation, foreign exchange gain/(loss) and exceptional items
    (1,511)
    108
    NM
    (413)
    56
    NM
    2.(e) Income derived from associated companies (With separate disclosure of any items included therein which are exceptional because of size & incidence)
    (74)
    0
    NM
    0
    0
    NM
    2.(f) Operating profit before income tax
    (1,585)
    108
    NM
    (413)
    56
    NM
    2.(g) Less income tax (Indicate basis of computation)
    0
    0
    NM
    0
    0
    NM
    2.(g)(i) Operating profit/(loss) after tax before deducting minority interests
    (1,585)
    108
    NM
    (413)
    56
    NM
    2.(g)(ii) Less minority interests
    30
    14
    114
    0
    0
    NM
    2.(h) Operating profit/(loss) after tax attributable to members of the company
    (1,555)
    122
    NM
    (413)
    56
    NM
    2.(i)(i) Extraordinary items (provide separate disclosure of items)
    0
    0
    NM
    0
    0
    NM
    2.(i)(ii) Less minority interests
    0
    0
    NM
    0
    0
    NM
    2.(i)(iii) Extraordinary items attributable to members of the company
    0
    0
    NM
    0
    0
    NM
    NM : Not Meaningful.

    - -
    Group
    Company
    - -
    S$'000
    %
    S$'000
    %
    - -
    - -
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    2.(i)(iv) Transfer to/from Exchange Reserve
    0
    0
    NM
    0
    0
    NM
    2.(i)(v) Transfer to Capital Reserve
    0
    0
    NM
    0
    0
    NM
    2.(i)(vi) Transfer to Reserve Fund
    0
    0
    NM
    0
    0
    NM
    2.(j) Operating profit/(loss) after tax and extraordinary items attributable to members of the company
    (1,555)
    122
    NM
    (413)
    56
    NM

    The accounting period of current half year is from January 1 to June 30, while that of the prior half year is from April 1 to September 30.

    Note to 2(c)
    Exceptional Item:-
    $'000
    Gain on divestment of 20% in Inovatif Media Asia Sdn Bhd ("IMA")
    612

    The transaction valued IMA at RM9.0 million (S$4.3 million) and the Group's carrying value of the remaining 80% share in IMA is RM1.25 million (S$603,000).

    Group Figures
    - -
    Latest period
    Previous corresponding period
    3.(a) Operating profit/(loss) [2(g)(i) above] as a percentage of turnover [1(a) above]
    (39.10)%
    1.50%
    3.(b) Operating profit [2(h) above] as a percentage of issued capital and reserves at end of the period
    (19.00)%
    1.40%
    3.(c) Earnings per ordinary share for the period based on 2(h) above after deducting any provision for preference dividends:-
    (i) Based on weighted average number of ordinary shares in issue
    (0.69) cents
    0.06 cents
    (ii) On a fully diluted basis

    (To disclose the basis used in arriving at the weighted average number of shares for the purposes of (c)(i) above and to provide details of any adjustments made for the purpose of (c)(ii) above)
    (0.69) cents
    0.06 cents
    3.(d) Net tangible asset backing per ordinary share based on existing issued share capital as at the end of the period reported on
    2.21 cents
    2.40 cents

    3.(e) To provide an analysis of expenses based on their function within the group for

      the current and previous corresponding period
    Group
    $'000
    %
    Latest half year to 30/06/2002
    Previous half year to 30/09/2001
    Increase/ (Decrease)
    Publication direct cost
    1,150
    1,455
    (21)
    Exhibition direct cost
    -
    644
    -
    Salaries and other benefits
    2,362
    2,847
    (17)
    Depreciation
    331
    592
    (44)
    Other operating expenses
    2,454
    2,116
    16
    TOTAL
    6,297
    7,654
    (18)

      Except for other operating expenses, which rose by 16%, largely as a result of increase in business development expenses, and general overheads, all other costs were lower. These were due to lower volume of activities, and better cost control. Overall, total expenses in the Group for the period decreased by 18% or $1.3 million.

      Note to 3(c)(i) and 3(d)

      For the purpose of calculating the earnings per ordinary share, the weighted average number of ordinary shares in issue is computed to be 223,649,500 as at 30 June 2002 (30 September 2001: 203,545,333).

      Fully diluted earning per share is based on allowing the full exercise of outstanding share option after adjusting the weighted average number of ordinary shares to reflect the effect of all potentially diluted ordinary shares. As the exercise price for the options was higher than the market price as at 30 June 2002, there is no dilution of earning per share from the share options outstanding.

      For the purpose of calculating the net tangible asset backing per ordinary share, the existing issued share capital is 227,087,000 shares as at 30 June 2002 (30 September 2001 : 220,212,000 shares).

      Note to 3(d)
      Net asset value per ordinary share based on existing issued share capital as at the end of the period reported on
      3.60 cents
      3.88 cents



    - -
    Group
    Company
    Item 4 is not applicable to interim results
    S$'000
    %
    S$'000
    %
    - -
    - -
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    Latest period
    Previous corresponding period
    Increase/ (Decrease)
    4.(a) Sales reported for first half year
    4.(b) Operating profit [2(g)(i) above] reported for first half year
    4.(c) Sales reported for second half year
    4.(d) Operating profit [2(g)(i) above] reported for second half year





    5.(a) Amount of any adjustment for under or overprovision of tax in respect of prior years

      Not Applicable


    5.(b) Amount of any pre-acquisition profits
      Not Applicable


    5.(c) Amount of profits on any sale of investments and/or properties

    -Item 5c Table
      Sale of investments/properties
      $Profit/(Loss)
      Not Applicable
    5.(d) Any other comments relating to Paragraph 5
      Not Applicable



    6. Segmental Results

    Turnover (S$'000)
    Profit (loss) before tax (S$'000)
    Latest half year to 30/06/2002
    Previous half year to 30/09/2001
    Latest half year to 30/06/2002
    Previous half year to 30/09/2001
    By Country
    Singapore
    2,921
    5,146
    (1,204)
    491
    Malaysia
    1,131
    1,959
    (307)
    (383)
    Total
    4,052
    7,105
    (1,511)
    108
    By business activities
    Magazine publishing
    4,052
    6,078
    (855)
    394
    Exhibition services
    -
    785
    -
    136
    Internet ventures
    -
    223
    -
    (78)
    HQ Cost, Investments & Other
    -
    19
    (656)
    (344)
    Total
    4,052
    7,105
    (1,511)
    108
        For segmental reporting by business activities, with effect from second half year FY2002, the Group's business activities will be segmented into Publishing, Education, Exhibition Services and HQ Cost, Investment & Other.

        This follows the Group's acquisition of Auston Technology Group Pte Ltd ("ATG"), whose principal activity is the provision of private tertiary education to school leavers and working adults, in September 2002. Based on the unaudited proforma consolidated financial results for the eight-month period ended 31 March 2002, the turnover and profit before tax were $7.9 million and S$2 million. If the results of ATG were consolidated, the Group's turnover and profit before tax for the relevant 3-month period from January 1 2002 to March 31 2002 would be increased by $3 million and $0.75 million respectively.



    7.(a) Review of the performance of the company and its principal subsidiaries

    Group turnover for 6-month period to June 30 2002 fell by 43% to $4.1 million from $7.1 million in the prior year period.

    The substantial drop in revenue is largely due to the poor market conditions in general, and the different accounting periods used for comparative purpose. Arising from the change in financial year last year, the accounting period of current half year is from January 1 to June 30, while that of the prior half year is from April 1 to September 30.

    Traditionally, turnover from publishing activities is lowest in the January to March quarter, as compared with the other 3 quarters in the year. Also, prior half year period included revenue from exhibitions. These exhibitions will now take place in H2 of the current fiscal period.

    For the period under review, the Group suffered an operating loss after tax of about $1.56 million as compared with an operating profit of $122,000 in the prior year period.

    The operating loss for the period include losses from magazine titles which have been suspended, and expenses incurred in the development of new titles, amounting in total to about $780,000, and a net gain of $612,000 arising from the divestment of a 20% stake in our publishing business in Malaysia.



      7.(b) Where a forecast, or a prospect statement, has been previously disclosed to shareholders,
        the issuer must explain any variance between the forecast or prospect statement and the
        actual results
        Not Applicable



      7.(c) A statement by the Directors of the Company whether any item or event of a material or
        unusual nature, which would have affected materially the results of operations of the Group
        and Company, has occurred between the date to which the report refers and the date on
        which the report is issued. If none, to give a negative statement.
        As disclosed above, the Directors are not aware of any item or event of a material or unusual nature, which would have affected materially the results of operations of the Group and Company, and which has occurred between the date to which the report refers and the date on which the report is issued.



      8. A commentary at the date of this announcement of the 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
        The Group is expected to put in a stronger performance in H2 as compared with H1, because of the following reasons:
        i. Seasonal nature of our magazine publishing business. Revenue from our magazine publishing activities in H2 traditionally constitute about 65% of annual revenue;
        ii. Revenue from periodicals, which are published annually will be booked in H2;
        iii. Revenue from exhibitions held annually in H2;
        iv. Revenue from new titles launched in H2; and
        v. Contributions from Auston Technology Group, which was acquired in September.

        In view of our on-going investments in the development of new magazines in both Singapore and the region in order to enhance long-term shareholder value, and the relatively difficult market conditions, the publishing division is unlikely to be profitable in the current year as a whole. This will be partly offset by contributions from Auston.

        Overall, while the Group is expected to show a profit in H2, it is unlikely that the profits from H2 will be able to offset the losses suffered in H1.

        At time of writing, the Group is still in discussion with Canada-based CXN Media Corporation to form a strategic alliance to establish a pan-Asia financial and publishing business. Under the terms of the proposed alliance, the joint venture will acquire from the Group the Smart Investor magazines in both Singapore and Malaysia for a total consideration of US$1.5 million (S$2.63 million). The transaction, if and when consummated in October 2002, will boost the Group's profits by about S$1.2 million in the current financial year.
      Also, the Group is exploring various ways of restructuring its capital to better reflect its balance sheet and continuing operations.



      9. Dividend

      (a) Any dividend declared for the present financial period?
      -
      None -
      (b) Any dividend declared for the previous corresponding period? None
      (c) Total Annual Dividend
      -
      -
      Latest Year ()
      Previous Year ()
       
      Ordinary
       
      Preference
      0
      0
       
      Total:
       

      (d) Date payable
          NIL


      (e) Books closure date
          NIL


      (f) Any other comments relating to Paragraph 9
          NIL



      10.(a) Balance sheet


      Group
      Company
      30/06/2002
      31/12/2001
      30/06/2002
      31/12/2001
      $'000
      $'000
      $'000
      $'000

      Fixed assets
      1,933
      2,063
      772
      837

      Investment in subsidiaries
      -
      -
      41,236
      41,236

      Investment in associated companies
      1,092
      44
      1,063
      -

      Long-term investments
      300
      300
      300
      300

      Goodwill on consolidation
      894
      981
      -
      -

      Intangible assets

      (Acquired Mastheads)

      2,276
      2,408
      -
      -

      Current assets
      9,292
      10,591
      9,042
      12,333

      Current liabilities
      (6,135)
      (6,311)
      (2,324)
      (5,307)

      Net current assets
      3,157
      4,280
      6,718
      7,026

      Term Loans, non-current portion
      (245)
      (266)
      -
      -

      Hire Purchase Liabilities, non-current portion
      (16)
      (57)
      (7)
      (44)

      Loan from a subsidiary
      0
      0
      (31,435)
      (31,205)

      Deferred taxation
      (898)
      (898)
      (898)
      (898)

      Net assets
      8,493
      8,855
      17,749
      17,252

      SHARE CAPITAL AND RESERVES:

      Share capital
      11,354
      11,010
      11,354
      11,010

      Share premium
      41,204
      40,638
      41,204
      40,638

      Accumulated losses
      (46,325)
      (44,770)
      (34,809)
      (34,396)

      Foreign currency translation reserves
      1,952
      1,894
      -
      -

      SHAREHOLDERS' FUNDS
      8,185
      8,772
      17,749
      17,252

      Minority Interests
      308
      83
      -
      -

      Capital Employed
      8,493
      8,855
      17,749
      17,252



      10.(b) Cash flow statement


      For the 6 month period ended
      30/06/2002
      30/09/2001
      $'000
      $'000
      Cash flows from operating activities
      (Loss)/ Profit before taxation and minority interest
      (1,585)
      108
      Adjustment for:
      Amortisation of goodwill on consolidation
      86
      86
      Share of loss of associated companies
      74
      -
      Depreciation of fixed assets
      331
      592
      Gain on disposal of fixed assets
      (2)
      (94)
      Amortisation of intangible assets
      115
      176
      Fixed assets written off
      126
      23
      Interest expense
      43
      83
      Operating cashflow before working capital changes
      (812)
      974
      (Increase)/ decrease in:
      Trade debtors
      784
      190
      Other debtors, deposits and prepayments
      (943)
      (765)
      Work-in-progress
      (25)
      12
      Due from related parties, net
      -
      12
      Due from associated companies, net
      (9)
      (1,082)
      Due from corporate shareholders, net
      -
      1
      (Decrease)/ increase in:
      Trade creditors
      75
      (730)
      Other creditors and accruals
      (382)
      (232)
      Cash used in operations
      (1,312)
      (1,620)
      Interest paid
      (43)
      (82)
      Net cash used in operating activities
      (1,355)
      (1,702)
      Cash flows from investing activities:
      Proceeds from sale of fixed assets
      6
      428
      Purchase of fixed assets
      (341)
      (52)
      Net investment in associated companies, net
      (980)
      (57)
      Net cash (used in)/ from investing activities
      (1,315)
      319
      Cash flows from financing activities
      Proceeds from issue of new shares
      -
      3,148
      Payment of expenses on issuance of new shares
      (53)
      -
      Contribution from a minority shareholder
      256
      -
      Repayment of hire purchase/ finance lease liabilities
      (127)
      (497)
      Proceeds from short-term bank loans
      28
      -
      Repayment of term loans
      (22)
      (4)
      Net cash from financing activities
      82
      2,647
      Net effect of exchange rate changes in consolidating subsidiaries
      87
      (569)
      Net (decrease)/ increase in cash and cash equivalents
      (2,501)
      695
      Cash and cash equivalents at beginning of the period
      4,557
      2,496
      Cash and cash equivalents at end of the period
      2,056
      3,191
      Cash and cash equivalents comprise
      Cash and bank balances
      2,553
      1,159
      Bank overdrafts (unsecured)
      (497)
      (369)
      Fixed deposits
      -
      2,401
      2,056
      3,191



      10.(c) Statement of changes in equity


      Share Capital
      Share Premium
      Accumulated Losses
      Foreign Currency Translation Reserve
      Total
      S$'000
      S$'000
      S$'000
      S$'000
      S$'000
      The Group
      For the period ended 30/06/2002
      Balance at 01/01/2002
      11,010
      40,638
      (44,770)
      1,894
      8,772
      Issuance of shares
      344
      566
      -
      -
      910
      (Loss) for the period
      -
      -
      (1,555)
      -
      (1,555)
      Movement during the period
      -
      -
      -
      58
      58
      Balance at 30/06/2002
      11,354
      41,204
      (46,325)
      1,952
      8,185
      For the period ended 31/12/2001
      Balance at 01/04/2001
      - as previously reported
      10,010
      38,490
      (44,801)
      2,169
      5,868
      - effect of adopting SAS 17
      -
      -
      (179)
      -
      (179)
      - as restated
      10,010
      38,490
      (44,980)
      2,169
      5,689
      Issuance of shares
      1,000
      2,148
      -
      -
      3,148
      (Loss)/ profit for the period
      -
      -
      210
      -
      210
      Movement during the period
      -
      -
      -
      (275)
      (275)
      Balance at 31/12/2001
      11,010
      40,638
      (44,770)
      1,894
      8,772
      The Company
      For the period ended 30/06/2002
      Balance at 01/01/2002
      11,010
      40,638
      (34,396)
      -
      17,252
      Issuance of shares
      344
      566
      -
      -
      910
      (Loss) for the period
      -
      -
      (413)
      -
      (413)
      Balance at 30/06/2002
      11,354
      41,204
      (34,809)
      -
      17,749
      For the period ended 31/12/2001
      Balance at 01/04/2001
      - as previously reported
      10,010
      38,490
      (33,562)
      -
      14,938
      - effect of adopting SAS 17
      -
      -
      (78)
      -
      (78)
      - as restated
      10,010
      38,490
      (33,640)
      -
      14,860
      Issuance of shares
      1,000
      2,148
      -
      -
      3,148
      (Loss)/ profit for the period
      -
      -
      (756)
      -
      (756)
      Balance at 31/12/2001
      11,010
      40,638
      (34,396)
      -
      17,252



      10.(d) Explanatory notes that are material to an understanding of the information provided in
          10.(a), (b) and (c) above
        The Company obtained the approval from the Shareholders of Company at an Extraordinary General Meeting held on 4 September 2002 to increase the authorized share capital of the Company from $20,000,000 divided into 400,000,000 ordinary shares of $0.05 each in the capital of the Company to $50,000,000 divided into 1,000,000,000 shares by creation of an additional 600,000,000 new shares.

        Also the Shareholders of Company approved the acquisition of Auston Technology Group Pte Ltd by issue of 115,901,251 ordinary shares of $0.05 each as consideration for the acquisition. As the date of this report, the Company already issued 115,901,251 ordinary shares of $0.05 each and the number of ordinary shares of $0.05 each for the Company has increased from 227,087,000 to 342,988,251.



      11. Details of any changes in the company's issued share capital
        Under a share swap agreement, the Company issued 6,875,000 new ordinary shares of S$0.05 each to Shareinvestor.com Holdings Pte Ltd ("SIH") in March 2002 in exchange of 25% equity interest in SIH.



      12. The group's borrowings and debt securities as at the end of the financial period reported
          on, and comparative figures as at the end of the most recently announced financial
          statements

          (a) Amount repayable in one year or less, or on demand
          As at 30/06/2002
          As at 31/12/2001
          Secured
          Unsecured
          Secured
          Unsecured
          22,893
          2,099,895
          0
          2,052,345


          (b) Amount repayable after one year
          As at 30/06/2002
          As at 31/12/2001
          Secured
          Unsecured
          Secured
          Unsecured
          244,571
          16,341
          266,213
          56,888


      (c) Any other comments relating to Paragraph 12
          NIL



      13. A statement that the same accounting polices and methods of computation are followed
          in the financial statements as compared with the most recent audited annual financial
          statements. Where there have been any changes or departure from the accounting policies
          and methods of computation, including those required by an accounting standard, this
          should be disclosed together with the reasons for the change and the effect of the change
        The Group has adopted the same accounting policies and method of computation for the current financial period as compared with the financial year ended 31 December 2001.





      BY ORDER OF THE BOARD

      Ricky Ang Gee Hing
      Managing Director
      16 September 2002

      Enclosed is a copy of the Investor Presentation on 16 September 2002.