Guoco Group Limited
(Incorporated in Bermuda with limited liability)
The board of directors of Guoco Group Limited ("Guoco") announces that First Capital Corporation Ltd ("FCC"), whose shares are listed on The Stock Exchange of Singapore Limited, and of which Guoco holds approximately 54.40% of the issued share capital, made an announcement on 14 September 2001 in respect of its audited results for the year ended 30 June 2001. An abridged version of the aforesaid announcement is set out as follows (note: the expressions "Group", "Company" and "$" mean "FCC group", "FCC" and "Singapore dollars" respectively):
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(Incorporated in the Republic of Singapore) Full-year financial statement on consolidated results for the year ended 30 June 2001. These figures have been audited:
Group Company
2001 2000 2001 2000
$'000 $'000 $'000 $'000
Turnover 241,443 219,267 118,177 113,537
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Investment income 19,400 8,739 60,566 60,257
Other income including
interest income 6,815 5,965 57,611 53,280
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Operating profit before income tax,
minority interests, extraordinary
items, interest on borrowings,
depreciation and amortisation,
foreign exchange gain/(loss)
and exceptional items 23,040 58,634 117,080 112,379
Interest on borrowings (53,090) (34,987) (54,609) (43,615)
Depreciation and amortisation (3,611) (4,039) (2,055) (1,481)
Foreign exchange (loss)/gain (1,505) 3,715 (2,968) 1,572
Exceptional items - 81,165 - 43,124
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Operating (loss)/profit before income
tax, minority interests and
extraordinary items but after
interest on borrowings, depreciation
and amortisation, foreign exchange
gain/(loss) and exceptional items (35,166) 104,488 57,448 111,979
Profit/(loss) derived from
associated companies 31,756 (24,816) - -
Less income tax (19,790) (20,119) (19,360) (22,800)
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Operating (loss)/profit after tax
before deducting minority interests (23,200) 59,553 38,088 89,179
Less minority interests 927 (4,497) - -
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Operating (loss)/profit after tax
attributable to members
of the company (22,273) 55,056 38,088 89,179
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Group Figures
2001 2000
Operating (loss)/profit after tax before
deducting minority interests
as a percentage of turnover (9.61%) 27.16%
Operating (loss)/profit after tax attributable
to members of the Company as a percentage of
issued capital and reserves at the end of year (2.22%) 5.18%
Earnings per ordinary share based on operating
(loss)/profit after tax attributable to
members of the Company:
Based on existing issued share capital (6.64 cents) 14.35 cents
On a fully diluted basis (5.42 cents) 13.37 cents
Net tangible asset backing per ordinary share $2.60 $2.76
Bonds and Bank Loan Due 2002 cum Warrants - Alternative Accounting Treatment If the International Accounting Standards No. 32 and No. 39 (which deal, among other things, with accounting for an issue of debts with detachable warrants) had been adopted when preparing the accounts, the profit after tax of the Group and of the Company would have been reduced by approximately $433,000, being adjustment for amortisation of the deemed discount on the Bonds and Bank Loan. On the same basis, the net assets of the Group and of the Company would have been increased by approximately $433,000, being the allocated value of the warrants less amortisation of the deemed discount on the Bonds and Bank Loan.
Group Company
2001 2000 2001 2000
$'000 $'000 $'000 $'000
Sales reported for first half year 143,663 97,223 78,797 72,512
Operating profit after tax before
deducting minority interests
reported for first half year 29,657 49,350 42,263 115,012
Sales reported for second half year 97,780 122,044 39,380 41,025
Operating (loss)/profit after tax
before deducting minority interests
reported for second half year (52,857) 10,203 (4,175) (25,833)
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Amount of any adjustment for under or overprovision of tax in respect of prior years There was a write back of $39,000 tax provisions in respect of prior years for the Group. SEGMENTAL RESULTS
Group
Profit/(Loss)
Group Before Interest
Turnover & Tax
2001 2000 2001 2000
$'000 $'000 $'000 $'000
By Business Segments:
Property development 175,559 158,154 (14,191) 23,222
Property investment 17,290 21,175 77,933 28,385
Insurance 13,521 15,002 1,882 5,959
Fund management &
investment trading 7,883 22,474 4,055 16,551
Equity investments 23,617 1,574 (21,971) (30,039)
Other operations 129,161 122,987 120,637 114,667
Eliminations (125,588)(122,099)(114,655)(111,695)
Profit on sale of subsidiary - - - 59,207
Loss on sale of
investment properties - - - (4,379)
Unallocated income - - 1,784 16,008
Unallocated expenses - - (5,794) (3,227)
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241,443 219,267 49,680 114,659
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By Geographical Segments:
Singapore 239,472 216,971 16,242 110,105
Others 1,971 2,296 33,438 4,554
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241,443 219,267 49,680 114,659
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BALANCE SHEET
Group Company
2001 2000 2001 2000
$'000 $'000 $'000 $'000
Non-Current Assets
Fixed Assets 2,466 2,068 - -
Investment Properties 446,600 305,170 - -
Interests in Subsidiaries - - 1,118,945 1,109,048
Interests in Associated
Companies 674,478 657,641 234,014 251,717
Amounts due from Minority
Shareholders of Subsidiaries 21,843 23,839 - -
Amounts due from
a Related Party (non-trade) 4,399 4,654 - -
Deferred Expenditure 2,882 3,999 2,030 3,745
Other Financial Assets 185,007 185,007 - -
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1,337,675 1,182,378 1,354,989 1,364,510
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Current Assets
Development Properties 1,176,913 1,356,917 - -
Trade and Other Receivables 47,171 40,433 7,101 20,375
Cash and Cash Equivalents 202,758 227,310 19,666 36,839
Other Financial Assets 246,819 175,799 - -
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1,673,661 1,800,459 26,767 57,214
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Less: Current Liabilities
Trade and Other Payables 133,381 139,507 9,869 11,372
Interest Bearing Bank Loans
and Borrowings 579,255 418,600 255,697 242,593
Provision for Taxation 20,757 39,059 14,813 16,473
Ordinary Dividend Payable 13,919 19,219 13,919 19,219
Preference Dividend Payable 859 862 859 862
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748,171 617,247 295,157 290,519
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Net Current Assets/(Liabilities) 925,490 1,183,212 (268,390) (233,305)
Less: Non-Current Liabilities
Amounts due to Minority
Shareholders of Subsidiaries 14,920 19,594 - -
Amount due to a
Related Party (non-trade) 16,536 16,536 - -
Interest Bearing Bank Loans
and Borrowings 1,164,927 1,200,713 371,734 445,990
Deferred Taxation 1,285 447 - -
Deferred Profit 19,500 19,500 19,500 19,500
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1,217,168 1,256,790 391,234 465,490
Less: Minority Interests 42,074 46,204 - -
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Net Assets 1,003,923 1,062,596 695,365 665,715
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Capital & Reserves
Share Capital 369,126 368,955 369,126 368,955
Reserve 634,797 693,641 326,239 296,760
--------- --------- --------- ---------
1,003,923 1,062,596 695,365 665,715
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REVIEW OF THE PERFORMANCE OF THE COMPANY AND ITS PRINCIPAL SUBSIDIARIES For the financial year ended 30 June 2001, the Group's turnover increased by 10% to $241.4 million, mainly due to recognition of turnover from units sold in Aquarius By The Park, Sanctuary Green and The Gardens at Bishan. The recognition of turnover is based on the percentage of completion method, which takes into account revenue attributable at each stage of the development activities to units actually sold. Turnover at the Company level increased slightly by 4% to $118.2 million primarily due to higher interest income. On the other hand, the Group incurred a higher interest expense of $53.1 million, mainly due to investment activities. In the light of prevailing weak market conditions, the Group made provisions for foreseeable losses on development projects. The rapid slowdown in the global economy has also affected the Group's investment in an associated company. These provisions (which were not anticipated at the time when the interim results were announced), together with share of losses in the associated company and higher financing costs, resulted in the Group reporting an operating loss after tax of $22.3 million against an operating profit after tax of $55.1 million in the previous corresponding year. The Group has also accounted for its share of losses in the associated company whose underlying asset is KLSE-listed Camerlin Group Berhad. The Group was however able to recognise a profit of $31.8 million from its associated companies, including those in London and China. The Group had undertaken an independent valuation of the Group's investment properties as at 30 June 2001 and an amount of $37.9 million was written down in the Group's revaluation reserves. After the write-down, the Group has a surplus of $196.2 million in its revaluation reserves. The net tangible asset backing per share has decreased from $2.76 as at 30 June 2000 to $2.60 as at 30 June 2001 mainly due to the provisions made by the Group on its development and investment properties. CURRENT DEVELOPMENT The Group's focus is on building up its residential property business. Non-core property assets would be divested so that financial resources could be re-allocated to the Group's core property business. In line with this divestment policy, A-Z Building was divested in July 2001 for a consideration of $59 million. The Group currently has four launched developments on the market: Aquarius By The Park, Sanctuary Green, The Gardens at Bishan and The Ladyhill (in which the Group has 40% interest). As at 13 September 2001, the Group has achieved sales of 652 units in Aquarius By The Park, 168 units in Sanctuary Green and 87 units in The Gardens at Bishan. The Group intends to launch Nathan Place and additional units in The Ladyhill in the later part of this year. Other developments may also be launched depending on market conditions. Aquarius By The Park, which is 90% sold, has obtained the Temporary Occupation Permit ("TOP") for Phase 1. TOP for Phase 2 can be expected by the end of the year. COMMENTARY ON CURRENT YEAR PROSPECTS The profitability of the Group for the current year will depend very much on sales of the Group's residential development units and the disposal of its non-core property assets. Sales of units would be affected by Singapore's economic outlook, which in turn would be influenced by global and regional factors. For the current year, the Group is required to adopt certain new accounting standards. One of such standards, namely SAS 33, requires the Group to state its financial assets at fair value. Fair value accounting, and consequential market price movements in these financial assets may impact the Group's reserves and/or profitability. DIVIDEND (a) Present Period
Name of Dividend Proposed Ordinary Preference
(First and Final)
Dividend Type Cash Cash
Dividend Rate 5 cents per ordinary 7 cents per preference
share less tax share less tax
Par value of shares $1.00 $0.01
Tax Rate 24.50% 24.5%/25.5%
(b) Previous Corresponding Period
Name of Dividend Proposed Ordinary Preference Preference
(First and Final)
Dividend Type Cash Cash Cash
Dividend Rate 7 cents per 7 cents per 5 cents per
ordinary preference preference
share share share
less tax less tax less tax
Par value
of shares $1.00 $0.01 $0.01
Tax Rate 25.50% 25.5%/26% 26%
(c) Total Annual Dividend
2001 2000
$'000 $'000
Ordinary 13,919 19,228
Preference 2,198 2,378
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Total: 16,117 21,606
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14 September 2001
By Order Of The Board
James Eng, Jr.
Director
Hong Kong, 14 September 2001
Please also refer to the published version of this announcement in South China Morning Post and Hong Kong Economic Journal.