SINGAPORE (April 26): Rowsley, the diversified property company with businesses in design and engineering, real estate development and hospitality, swung to a net loss of $1.6 million for 1Q17 ended March from a profit of $4.8 million last year.
Its bottomline was dragged down by lower other income, higher staff costs, a net foreign exchange loss and smaller fair value gain.
Group earnings before interest, tax, depreciation, and amortisation (EBITDA) stood at $1.6 million, 79% lower compared to $7.8 million a year ago after the group recorded fair value gains of $2.9 million, 68% lower than the $9 million recorded a year ago.
The 1Q17 gains arose from remeasurement of the company’s purchase consideration payable in the form of share payment at the lower closing share price as at end March.
Group revenue was up 10% at $22.6 million from a year ago. The increase came mainly from engineering consultancy Squire Mech’s contribution of $2.7 million. Squire Mech became a subsidiary of the group on Aug 4, 2016.
With the completion of the acquisition of Ariva in the quarter under review, Rowsley says the hospitality management and consultancy firm will now enhance its hospitality business in the Asia Pacific. Separately, the group is actively working on plans to secure a strategic partner for the expansion of Hotel Football.
In the UK, planning application for St. Michael’s was submitted in January. The project will undergo further review by Historic England in May and the final planning permission by the Manchester City Council is expected around the third quarter of this year.
In the design and engineering business, the group will continue to target major local projects such as Changi Airport Terminal 5 and Singapore Institute of Technology as well as expand its business in resurgent markets such as Vietnam and the Middle East.
The group remains focused on managing its cost structure and driving synergies across its various businesses.
Net cash used in operating activities for 1Q17 amounted to $3.6 million, while net cash used in financing activities of $3.3 million was mainly due to payment of interest on the $100 million notes issued under the Medium Term Note Programme.
As at end March, the group’s cash and cash equivalents amounted to $29.4 million.
Shares of Rowsley closed at 9 cents on Wednesday before the announcement.
