Page 24-25 - ar2014

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The Group’s revenue for FY2014
decreased by approximately 54.0% to
S$39.76 million compared to S$86.37
million a year ago (“FY2013”), mainly
driven by the fall in sales of automobiles
which accounted for 78.8% of total
FY2014 revenue.
Sales of automobiles fell 60.1% from
S$78.53 million in FY2013 to S$31.33
million in FY2014 arising from lower
new and pre-owned automobile sales.
New automobi le sales decreased
S$37.21 million with fewer Lamborghini
automobiles being sold. In FY2014, the
Group sold 15 units of Lamborghinis as
compared to 42 units in FY2013. This
was primarily due to the implementation
of new regulations related to increased
additional registration fees and the
tightening of loan financing restrictions.
Lamborghini sales were also affected
by fewer Gallardo models sold as the
model has come to the end of its life
cycle. Pre-owned automobile sales
decreased S$9.99 million mainly due
to fewer pre-owned automobiles sold
(FY2014: 13; FY2013: 32) as a result of the
more stringent loan financing restrictions.
Sales of deLaCour watches increased
40.1% from S$2.27 million in FY2013
to S$3.18 million in FY2014 due to
higher number of watches sold through
distributors.
In FY2014, revenue from provision of
after-sales services declined 5.7% to
S$5.25 million from S$5.57 million in
FY2013 due to the decrease in sales
of extended warranties relating to
pre-owned automobiles and the fall in
pre-delivery services relating to sales
of new automobiles.
COSTS OF SALES
The 55.3% decrease in cost of sales in
FY2014 from S$69.17 million in FY2013
to S$30.93 million was mainly due to:
(i) a decrease in cost of purchases of
S$17.96 million;
(ii) a decrease in vehicle taxes and
fees of S$19.45 million; and
(iii) a decrease in other costs of S$0.83
million.
GROSS PROFIT AND GROSS PROFIT
MARGIN
Gross profit decreased 48.7% from
S$17.20 million in FY2013 to S$8.83
million in FY2014. Notwithstanding the
decline in gross profit, our gross profit
margin increased from approximately
19.9% in FY2013 to 22.2% in FY2014,
largely as a result of a change in sales
mix. Sales of automobiles generally have
lower gross profit margins compared to
the provision of after-sales services and
sale of deLaCour watches.
LAMBORGHINI AVENTADOR ROADSTER
OPERATING &
F INANCI AL REV I EW
OTHER INCOME
Other income increased 25.5%, from
S$4.14 million in FY2013 to S$5.19
million in FY2014, mainly due to the
one-time recognition of the remaining
balances of deferred income amounting
to S$1.36 million that was previously
deferred and now recognised upon the
completion of the sale and leaseback
of 30 Teban Gardens Crescent on 17
March 2014. The increase in other
income was offset by a decrease in
commission income of S$0.50 million
arising mainly from a decrease in hire-
purchase commission income.
OTHER CREDITS AND CHARGES
The Group recorded a net credit of
S$16.35 million in FY2014 as compared
to a net charge of S$0.49 million in
FY2013, primarily due to:
(i) a one-time gain of S$16.21 million
arising from the sale and leaseback
of 30 Teban Gardens Crescent; and
(ii) a foreign exchange gain of S$0.05
million as compared to a foreign
exchange loss of S$0.21 million in
FY2013. The foreign currency loss
in FY2013 arose mainly from the
unwinding of forward currency
contracts in early FY2013 at a loss
as the Euro appreciated against the
Singapore dollar. While in FY2014,
the Group did not transact any
forward currency contracts and
the foreign exchange gain arose
mainly from our foreign currency
payments.
MARKETING AND DISTRIBUTION
EXPENSES
Marketing and distribution expenses
decreased by approximately 12.9%,
from S$3.36 million in FY2013 to S$2.93
million in FY2014, mainly due to:
(i) a decline in rental expenses of
S$0.12 million arising from the
non-renewal of lease at 11 Leng
Kee Road; and
(ii) a fal l in sales commission by
S$0.34 million due to lower sale of
automobiles achieved in FY2014.
ADMINISTRATIVE EXPENSES
Our administrative expenses rose
11.0% from S$8.74 million in FY2013
to S$9.70 million in FY2014, largely
due to:
(i) an increase of listing expenses of
S$0.60 million; and
(ii) higher employee benefits expenses
by S$0.15 million due to increased
headcount.
FINANCE COSTS
Finance costs rose by about 15.9% from
S$0.47 million in FY2013 to S$0.54
million in FY2014, mainly due to an
increase in the level of bank borrowings
in FY2014.
INCOME TAX EXPENSE
Income tax expense decreased 87.8%
from S$1.63 million in FY2013 to S$0.20
million in FY2014, mainly due to lower
profit before tax achieved, excludingnon-
taxable capital gains from the sale and
leaseback arrangement, and utilisation
of tax losses brought forward from
EuroAutomobile. The Group’s effective
tax rates for FY2014 and FY2013 were
1.1% and 19.5% respectively.
PROFIT, NET OF TAX
Profit after tax jumped by approximately
S$10.30 million or 153.3%, from S$6.72
million in FY2013 to S$17.02 million in
FY2014.
SALES OF DELACOUR WATCHES
from S$2.27 million in FY2013 to
S$3.18 million in FY2014
40.1%
INCREASED
PAGANI HUAYRA
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