ANNUAL REPORT
2016
OPERATING
& FINANCIAL REVIEW
Gross Profit and Gross Profit Margin
Gross profit increased by approximately S$0.77 million or 10.5%
from S$7.36 million in FY2015 to S$8.13 million in FY2016. Gross
profit margin decreased from18.2% in FY2015 to 12.8% in FY2016
mainly due to the decrease in gross profit margin from sales of
new and pre-owned automobiles from 12.7% in FY2015 to 9.3%
in FY2016 as a result of more competitive pricing.
Other Income
Other income increasedby approximately S$2.07millionor 32.0%,
from S$6.47 million in FY2015 to S$8.54 million in FY2016. The
increase was mainly due to increase in commission income of
S$1.19million as a result of higher consignment sales commission
contributed by the new subsidiary acquired in August 2014,
increase in leasing income of S$0.29 million and other income
of S$0.46 million mainly arising from registration of the X30
Challenge event, Singapore¡¯s first international karting racewhich
took place in April 2016. The Group¡¯s deLaCour watch brandwas
title sponsor of the race.
Interest Income
Interest income increased by approximately S$0.05 million or
67.3%, from approximately S$0.07 million in FY2015 to S$0.12
million inFY2016mainly due to interest earned fromfixeddeposits.
Other Credits and Charges
Other credit increased by approximately S$1.56 million from a
charge of approximately S$1.47 million in FY2015 to a credit of
approximately S$0.09million in FY2016. The increasewasmainly
due to absence of an impairment of goodwill of S$1.97 million
relating to the acquisition of a subsidiary in FY2015. This was
partially offset by an absence of other payables written back of
S$0.51million relating to income recognised on non-refundable
customer deposits that were more than three years and other
long outstanding owings that were deemed not payable.
Marketing and Distribution Expenses
Marketing and distribution expenses increased by approximately
S$0.13 million or 4.0%, from S$3.32 million in FY2015 to S$3.45
million in FY2016. The increase was mainly due to higher sales
commission expense incurredwhichwas in linewith the increase
in revenue. Sales commission expense stood at S$0.59million in
FY2016 as compared to S$0.34 million in FY2015.
Administrative Expenses
Administrativeexpenses increasedby approximately S$2.99million
or 21.7% from S$13.79 million in FY2015 to S$16.78 million in
FY2016. The increase was mainly due to an increase in property
tax of S$0.22 million due to upwards revision of assessment; an
increase inemployee benefits expenses of S$1.14milliondue to an
increase in headcount as well as accruals for bonus; an increase
in rental expense of S$1.12 million mainly due to the opening of
deLaCour Boutique at Wisma Atria in December 2014 as well as
the Lamborghini display and retail store at Suntec City Mall in
November 2015; and finally an increase in depreciation expense
of S$0.19million arisingmainly from additions of motor vehicles
during FY2016 as well as full twelve months depreciation for
property, plant and equipment acquired near end of FY2015.
REVENUE ACHIEVED BY THE GROUP IN FY2016WAS S$63.53
MILLION, A 57.4% INCREASE FROM S$40.37 MILLION IN
FY2015. THE INCREASE WAS DRIVEN BY THE GROUP¡¯S SALES
OF AUTOMOBILE SEGMENT.
ALFA ROMEO / 4C
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