SINGAPORE (Feb 22): Secura Group sunk in losses of $1.78 million in FY17, compared to earnings or $0.85 million in FY16 on impairment of goodwill.
Revenue for the full year ended Dec came in at $41.6 million, 15.3% higher than $36.1 million a year ago.
Revenue from the group’s security guarding segment increased 16.4% or $3.49 million due to securing more contracts and increase in average selling price.
Revenue from its systems integration segment increased 149.6% or $1.31 million, contributed by the group’s subsidiary, Soverus Kingdom Systems, which was newly incorporated in Oct 2016.
Revenue from the cyber security segment also increased 43.4% or $0.72 million, after the acquisition of 100% equity interest in Red Sentry Pte Ltd (RSPL) on June 30 2016.
Revenue from the mobile forensics segment increased 100% or $1.09 million, following the group’s entry into this market in Sept 2016.
Revenue from other business segments also increased by about $70,000.
These were partially offset by a decrease in revenue from the security printing segment of 10.1% or $1.17 million, mainly due to a decrease in demand for commercial printing products.
Cost of sales increased 18.1% to $34.7 million from $29.3 million last year, bringing gross profit for FY17 to $6.90 million, 2.8% higher than $6.71 million last year.
Other operating income was 10.7% less at $1.70 million from $1.91 million in the previous year, due mainly to a decrease in government grants under the Wage Credit Scheme.
Distribution and selling expenses jumped 59.6% to $2.83 million compared to $1.77 million a year ago, due mainly to the incremental cost of the group’s new subsidiaries and the amortisation of customer relationship arising from the fair valuation of Secura Singapore and its subsidiaries and RSPL.
Administrative expenses also increased 18.3% to $6.88 million from $5.81 million in FY16, due mainly to the increase in corporate staff cost to augment the group’s corporate functions to support its expansion plans and incremental costs incurred by the new subsidiaries, as well as doubtful debt provision of $0.17 million..
During FY17, the group recorded impairment of goodwill of $1.39 million, which was absent in FY16. This relates to goodwill on consolidation arising from the acquisition of RSPL. This expenses were deemed necessary as the acquired subsidiary was loss making in the current year and the business outlook and projection resulted in estimated recoverable amount being less than the carrying value of the assets
The group will continue to focus on business growth and cost rationalisation to ensure better returns moving forward.
Shares in Secura closed at 8 cents on Thursday.
