Captii Limited

Investor Relations.
 
 

Financial Statements And Related Announcement - Full Yearly Results

Financials Archive

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Consolidated Statement of Comprehensive Income

 
Group
12 months ended 31 December
2019
2018
Inc/(dec)
 
S$'000
S$'000
%
Revenue
23,813
31,476
(24.3)
Cost of Sales
(11,393)
(19,483)
(41.5)
Gross profit
12,420
11,993
3.6
Other Items of Income:      
Interest Income
149
98
52.0
Other Gains
498
1,000
(50.2)
Other Items of Expense:      
Technical Support Expenses
(4,477)
(3,643)
22.9
Distribution Costs
(1,113)
(1,298)
(14.3)
Administrative Expenses
(3,283)
(3,440)
(4.6)
Other Losses
(496)
(1,007)
(50.7)
Finance Costs
(140)
(27)
418.5
Profit Before Income Tax
3,558
3,676
(3.2)
Income Tax Expenses
(691)
(292)
136.4
       
Profit, Net of Tax
2,867
3,384
(15.3)
       
Profit, Net of Tax Attributable to:      
Owners of the Company
2,076
2,341
(11.4)
Non-Controlling Interest
791
1,043
(24.2)
Profit, Net of Tax
2,867
3,384
(15.3)

Consolidated Statement of Comprehensive Income

 
Group
12 months ended 31 December
2019
2018
Inc/(dec)
 
S$'000
S$'000
%
Profit, Net of Tax
2,867
3,384
(15.3)
Other Comprehensive Income:      
Item that may be reclassified subsequently to profit or loss:      
Exchange Differences on Translating Foreign
Operations, Net of Tax
45
13
239.7
Total Comprehensive Income for the year
2,912
3,397
(14.3)
       
Total Comprehensive Income for the year
Attributable to:
     
Owners of the Company
2,127
2,370
(10.3)
Non-Controlling interest
785
1,027
(23.7)
Total Comprehensive Income for the year
2,912
3,397
(14.3)

Balance Sheet

 
Group
Group
As at
As at
31/12/2019
31/12/2018
S$'000
S$'000
   
ASSETS    
Non-Current Assets    
Plant and Equipment
1,690
1,825
Investment Property
2,301
2,305
Intangible Assets
10,888
11,050
Investments in Subsidiaries
-
-
Investment in an Associate
-
2,255
Other Financial Assets
12,073
8,948
Deferred Tax assets
1,362
1,313
Trade and Other Receivables
599
-
Total Non-Current Assets
28,913
27,696
     
Current assets    
Inventories
4
488
Trade and Other Receivables
11,861
13,045
Other Assets
3,073
5,834
Cash and Cash Equivalents
10,173
8,686
Total Current Assets
25,111
28,053
     
Total Assets
54,024
55,749
     
EQUITY AND LIABILITIES    
Equity    
Share Capital
31,948
31,948
Retained Earnings
17,048
15,371
Foreign Currency Translation Reserve
(8,242)
(8,293)
Equity, Attributable to Owners of the Parent
40,754
39,026
Non-Controlling Interest
4,655
4,080
Total Equity
45,409
43,106
     
Non-Current Liabilities    
Deferred Tax Liabilities
-
53
Total Non-Current Liabilities
-
53
     
Current Liabilities    
Income Tax Payables
344
102
Trade and Other Payables
4,688
7,047
Other Liabilities
1,931
3,423
Borrowings
1,652
2,018
Total Current Liabilities
8,615
12,590
     
Total Liabilities
8,615
12,643
     
Total Equity and Liabilities
54,024
55,749
     

Review of results for the financial year ended 31 December 2019 as compared to corresponding financial year ended 31 December 2018

Group Revenue

The Group recorded consolidated revenue of S$23.813 million for the financial year ended 31 December 2019 ("2019"), a decrease of 24.3% against the revenue achieved in the corresponding financial year ended 31 December 2018 ("2018"). The decline in Group revenue for 2019 is attributable to lower revenue recorded by GlobeOSS.

GlobeOSS recorded revenue of S$10.876 million in 2019, a decrease of 44.7% from the S$19.673 million recorded in 2018. This decrease in revenue was due to lower system sale contract revenues as a result of uncertainty and lumpiness in the contribution of system sale contracts, coupled by delay in the award of new system sale contracts.

In contrast, Unifiedcomms posted revenue of S$12.937 million in 2019, an increase of 9.6% from the S$11.803 million recorded in 2018. This improvement in revenue was driven by higher system sale revenues.

The Group's sales mix in 2019 showed a higher proportionate contribution of revenue of a recurring nature, with revenue from managed service contracts representing 60.8% of the Group's total revenue in 2019 as compared to 45.7% in 2018. The higher contribution of managed service contracts to the Group's sales mix in 2019 was mainly due to lower system sale contract revenues from GlobeOSS, which had decreased 45.3% from S$17.091 million in 2018 to S$9.345 million in 2019.

Gross Profit and Gross Profit Margins

Although Group revenue was lower in 2019, gross profit was higher at S$12.42 million as compared to S$11.993 million recorded in 2018. This is attributtable to the higher gross profit margin of 52.2% in 2019 against 38.1% in 2018, which was driven by higher gross profit margin on system sale contract revenues. This is attributable to the higher proportionate contribution of system sale contract revenues by Unifiedcomms to Group revenue, which generally delivers higher gross profit margins.

Gross profit margin recorded by the Group on its managed service contract revenues decreased to 51% in 2019 from 53.5% in 2018. This decrease in gross profit margin was mainly due to higher third-party costs on certain managed service contracts.

Interest Income

The Group recorded interest income of S$0.149 million in 2019, 52% higher against the S$0.098 million recorded in 2018, as a result of higher bank balances in this reporting year.

Other gains

The Group recorded other gains of S$0.498 million in 2019, 50.2% lower than the S$1 million recorded in 2018. This is mainly attributable to lower fair value gain assessed on the Group's venture investment portfolio.

Other Items of Expense

The Group recorded total expenses of S$9.509 million in 2019, 1% higher than the S$9.415 million incurred in 2018. This marginal increase in total expenses was a result of the following items' movement:-

Net Profit and EBITDA

The Group recorded net profit of S$2.867 million in 2019, 15.3% lower than the S$3.384 million recorded in 2018. This is mainly attributable to the lower other gains and deferred tax asset recorded in 2019, though partly mitigated by higher gross profit.

In contrast with the above, the Group recorded EBITDA of S$4.663 million in 2019, 1% slightly higher than the S$4.615 million recorded in 2018.

Detailed Segmental Breakdown of Group Revenue and Gross Profit

The detailed segmental breakdown of the Group's revenue and gross profit for 2019, together with comparative results for 2018 is provided below:

Table 8.1: Group revenue as analysed by business unit for the financial year ended 31 December

 
2019
S$'000
Sales mix
%
2018
S$'000
Sales mix
%
Unifiedcomms
12,937
54.3
11,803
37.5
GlobeOSS
10,876
45.7
19,673
62.5
Captii Ventures
-
-
-
-
Others
-
-
-
-
Total
23,813
100.0
31,476
100.0

Unifiedcomms - Segment for content-driven mobile VAS, messaging and signaling systems, solutions and managed services.

GlobeOSS - Segment for mobile network operation support systems, solutions and managed services.

Captii Ventures - Segment for strategic investment in early and late-stage technology ventures.

Others - Segment for operational headquarters of the Group and investment holding.

Table 8.2: Group revenue as analysed by geographical segment for the financial year ended 31 December

External Sales
2019
Unifiedcomms
S$'000
GlobeOSS
S$'000
Others
S$'000
Group
S$'000
South East Asia (SEA)
11,909
10,872
-
22,781
South Asia (SA)
578
-
-
578
Middle East & Africa (MEA)
450
-
-
450
Others
-
4
-
4
Total
12,937
10,876
-
23,813

External Sales
2018
Unifiedcomms
S$'000
GlobeOSS
S$'000
Others
S$'000
Group
S$'000
SEA
10,700
19,659
-
30,359
SA
724
-
-
724
MEA
379
-
-
379
Others
-
14
-
14
Total
11,803
19,673
-
31,476

Table 8.3: Group revenue as analysed by contract type for the financial year ended 31 December

External Sales
2019
2018
System Sale(1)
Managed Service(2)
Group
System Sale(1)
Managed Service(2)
Group
Revenue
9,345
14,468
23,813
17,091
14,385
31,476
Gross Profit
5,037
7,383
12,420
4,303
7,690
11,993
Gross Profit (%)
53.9%
51.0%
52.2%
25.2%
53.5%
38.1%

(1) System Sale - this refers to contracts that involve the outright purchase by customers of systems comprising the Group's products and technologies, and where these systems are in turn delivered as turnkey solutions. The scope of work for a system sale contract includes system design, implementation, testing and commissioning services.

(2) Managed Service - this refers to contracts that involve the provision of both systems comprising the Group's products and technologies as well as the Group's professional services, on a recurring, revenue sharing, software-as-a-service, pay-per-use or monthly or quarterly fixed and variable fee basis. Also treated as a managed service contract are system maintenance and technical support contracts with existing customers of the Group.

Review of the Group's financial position as at 31 December 2019 as compared to the Group's financial position as at 31 December 2018

Non-cash current assets of the Group decreased from $19.367 million as at 31 December 2018 to S$14.938 million as at 31 December 2019. This 22.9% decrease in non-cash current assets was mainly due to a decrease in inventories, trade and other receivables and other assets, as a result of project deployment and lower revenue recorded.

Total non-current assets of the Group increased from S$27.696 million as at 31 December 2018 to S$28.913 million as at 31 December 2019 representing an increase of 4.4%. This increase consists of:-

Total liabilities of the Group decreased from S$12.643 million as at 31 December 2018 to S$8.615 million as at 31 December 2019. This 31.9% decrease in total liabilities is attributable to a decrease in trade and other payables and borrowings following repayments in the reporting year.

Review of the Group's cash flow for the financial year ended 31 December 2019 as compared to the corresponding financial year ended 31 December 2018

The Group's net cash flow from operations for 2019 was S$4.418 million, as compared to S$2.778 million for 2018, an increase of 59.1%. This increase was primarily due to lower working capital incurred of S$0.03 million for 2019, as compared to S$1.743 million for 2018, which was mainly contributed by higher collection related to trade receivables.

The Group's net cash flow used in investing activities for 2019 was S$1.435 million, as compared to S$1.785 million for 2018. The lower net cash used in investing activities was mainly due to the lower volume of venture investments made in the current year as compared to 2018. The decrease was partly offset by absence of proceed from disposal of investment.

The Group's net cash flow used in financing activities for 2019 was S$1.212 million, in contrast with the net cash flow from financing activities of S$0.94 million for 2018. This decrease was mainly due to i) Lower proceeds from borrowings; and ii) Higher repayment made to borrowings. The impact was partly mitigated by withdrawal of restricted deposits placed as performance bond in connection with new system sale contracts requirement, in contrast with additional restricted deposits placed in 2018.

Commentary

The directors and management of the Group expect the financial year 2020 to be challenging but remain optimistic about growth prospects.

Although the growth in system sale business of GlobeOSS from 2017 to 2018 had significantly augmented the slower than desired growth of the Group's managed service contract portfolio, the significant decline in GlobeOSS revenues in 2019 evidenced the lumpiness that is to be expected in the contribution of system sale contracts to the Group's results.

The need for management to continue to strengthen the Group's managed service contract portfolio and to continue to grow its venture investment portfolio as the basis for delivering steady and sustainable growth, remains.

The growing interest and opportunity in internet-driven application services for enterprises, fintech as well as internet and handset-app delivered digital media will guide the Group's venture investment activities. The Group's venture investment plans in the year ahead will continue to focus primarily on these growth businesses in the SEA region and will complement the organic growth strategy in place for the Unifiedcomms and GlobeOSS businesses.