SINGAPORE (May 15): Kingsmen Creatives saw earnings decline 47.4% to $234,000 in 1Q19 from $445,000 in 1Q18 on higher expenses.
This was despite a 25.7% increase in revenue to $76.7 million from $61.0 million a year ago.
The Exhibitions & Thematic division saw an 11.9% y-o-y increase in revenue to $33.4 million, with the key contributors including major event and projects, such as Changi Experience Studio, Shenzhen Binhai Tencent Exhibition Centre, Singapore Bicentennial Event, Singapore Motorshow 2019, SMBC Singapore Open 2019 and thematic projects in the region.
The Retail & Corporate Interiors division recorded revenue of $37.7 million, 51.5% higher than the previous year, with key contributing accounts including clients and brand names such as Coach, Hanoi French Hospital, Kate Spade, Lululemon, Michael Kors, Ralph Lauren, Tiffany & Co. and Van Cleef & Arpels.
The Research & Design division achieved a revenue of $4.3 million, an increase of 28.7% compared to 1Q18. The key accounts which contributed to the division's revenue included clients and brand names such as Burberry, Gucci, Procter & Gamble Co. and TAG Heuer, and thematic projects in the region.
The overall increase in revenue was partially offset by a 56.8% y-o-y decrease in revenue from the group’s Alternative Marketing division to $1.2 million. The key contributors to the division's revenue included events and projects from clients such as Automobile Association of Singapore, National Council on Problem Gambling and Singapore Cruise Centre.
With cost of sales rising by 28.9% y-o-y to $58.8 million, 1Q19 gross profit came in at $17.8 million, 16.0% higher than $15.4 million last year.
Interest income increased by 57.1% y-o-y to $121,000, while other income dropped 12.4% y-o-y to $871,000.
Depreciation of property, plant and equipment was 58.8% higher y-o-y at $829,000, while employee benefits expenses increased by 6.2% y-o-y to $13.8 million, other expenses increased 24.9% y-o-y to $3.4 million, and interest expense more than doubled to $310,000.
Income tax expense also more than tripled y-o-y to $389,000.
As at end March, the group’s cash and cash equivalents stood at $69.2 million.
As at Apr 30, the group has secured contracts of $217 million, of which $200 million is expected to be recognised in FY19.
In its outlook statement, the group continues to see good demand from the market and its clients for its expertise and broad range of service offerings. The line-up of projects and attractions already secured, and are currently being pursued, provide a firm foundation for continued momentum in its core business areas.
The group will also continue its expansion into branded experiential attractions and focus on the three broad areas of active play, edutainment and live events, leveraging on the capabilities that have been built over the years to innovate and provide differentiated and unique experiences.
Barring unforeseen circumstances, it expects FY19 to be a profitable year.
Shares in Kingsmen closed 3.92% higher at 53 cents on Wednesday.
