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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 50.7% of the issued share capital, made an announcement on 10 September 1999 in respect of its audited results for the year ended 30 June 1999. 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 AND DIVIDEND ANNOUNCEMENT Full-year financial statement on consolidated results for the year ended 30 June 1999. These figures have been audited:
Group Company
1999 1998 1999 1998
$'000 $'000 $'000 $'000
Turnover 471,671 627,401 195,693 422,833
========= ========= ========= =========
Investment income/(loss) 18,430 (14,359) 135,555 358,166
Other income including interest
income 15,560 9,818 60,138 64,667
========= ========= ========= =========
Operating (loss)/profit before
income tax, minority interests,
extraordinary items,interest on
borrowings, depreciationand
amortisation, foreign exchange
gain/(loss) and exceptional
items (70,953) 33,891 193,990 421,793
Interest on borrowings (30,345) (14,406) (38,447) (49,524)
Depreciation and amortisation (2,557) (1,766) (521) (479)
Foreign exchange gain/(loss) 752 (25,516) (4,792) (23,076)
--------- --------- --------- ---------
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 (103,103) (7,797) 150,230 348,714
Income derived from associated
companies (29,625) 25,471 - -
--------- --------- --------- ---------
Net profit/(loss) before tax (132,728) 17,674 150,230 348,714
Less income tax (22,616) (43,620) (43,086) (97,360)
--------- --------- --------- ---------
Operating (loss)/profit after
tax before deducting minority
interests (155,344) (25,946) 107,144 251,354
Less minority interests 9,855 2,725 - -
--------- --------- --------- ---------
Operating (loss)/profit after
tax attributable to members
of the company (145,489) (23,221) 107,144 251,354
Extraordinary items (33,890) - (169,296) (109,078)
Transfer to Capital Reserve (43) (40) - -
--------- --------- --------- ---------
Operating (loss)/profit after
tax and extraordinary items
attributable to members of
the company (179,422) (23,261 (62,152) 142,276
========= ========= ========= =========
N/M: Not meaningful The extraordinary items at Company level refer to provisions for diminution in value of investments in subsidiaries and an associated company and loss on disposal of investment in an associated company.
Group Figures
1999 1998
Operating loss as a percentage
of turnover (32.93)% (4.14)%
Operating loss as a percentage
of issued capital and
reserves at end of yea (11.59)% (1.66)%
Loss per ordinary share for
the year after deducting any
provision for preference
dividends:
Based on existing issued
share capital (50.2) cent (10.5) cents
On a fully diluted basis N/A N/A
Net tangible asset backing per
ordinary share $2.78 $4.08
Group Company
1999 1998 1999 1998
$'000 $'000 $'000 $'000
Sales reported for first half
year 320,250 236,452 69,211 385,868
Operating (loss)/profit reported
for first half year (20,907) 8,171 22,015 238,851
Sales reported for second half
year 151,421 390,949 126,482 36,965
Operating (loss)/profit reported
for second half year (134,437) (34,117) 85,129 12,503
Amount of any adjustment for under or overprovision of tax in respect of prior years The income tax provisions for the Group include a write-back provision of $6,465,000 arising from a 10% tax rebate for the Year of Assessment 1999. Amount of profits on any sale of investments and/or properties
SEGMENTAL RESULTS
Group Profit/(Loss)
Group Before Interest
Turnover & Tax
1999 1998 1999 1998
$'000 $'000 $'000 $'000
By Business Activity:
Property development and
investment 434,958 606,009 (117,654) 45,513
Fund management and investment
income 22,758 7,016 29,496 (29,488)
Insurance services 13,955 14,376 15,400 (9,416)
Associated companies - - (29,625) 25,471
--------- --------- --------- ---------
471,671 627,401 (102,383) 32,080
========= ========= ========= =========
By Geographical Location:
Singapore 469,753 627,370 (59,155) 19,132
Others 1,918 31 (43,228) 12,948
--------- --------- --------- ---------
471,671 627,401 (102,383) 32,080
========= ========= ========= =========
BALANCE SHEETS
Group Company
1999 1998 1999 1998
$'000 $'000 $'000 $'000
Fixed Assets 2,406 6,103 - -
Investment Properties 536,372 615,000 - -
Long-term Investments 89,301 115,066 - -
Investments in Subsidiaries - - 719,695 805,748
Investments in Associated
Companies 414,043 433,235 9,735 19,807
Deferred Expenditure 3,126 2,537 1,416 1,937
Current Assets 1,926,176 2,288,678 1,245,483 1,358,178
Less: Current Liabilities 539,157 702,252 892,447 1,157,300
Net Current Assets 1,387,019 1,586,426 353,036 200,878
Less: Non-Current Liabilities
Long-term bank loans 833,634 757,853 - -
Long-term notes & bonds 288,014 431,344 288,014 285,344
Deferred taxation 4,296 31,150 - -
1,125,944 1,220,347 288,014 285,344
--------- --------- --------- ---------
1,306,323 1,538,020 795,868 743,026
========= ========= ========= =========
Representing:
Share Capital & Reserves
Share Capital 363,569 295,003 363,569 295,003
Share Premium 397,826 329,632 397,826 329,632
Capital Reserve 9,331 9,331 - -
Exchange Translation Reserve 38,578 58,493 - -
Investment Revaluation
Reserve 218,124 276,804 - -
Capital Redemption Reserve 1,083 1,040 1,000 1,000
Unappropriated Profit 226,485 427,673 33,473 117,391
--------- --------- --------- ---------
1,254,996 1,397,976 795,868 743,026
Minority Interests 51,327 97,044 - -
Interest of Preference
Shareholders in a Subsidiary - 43,000 - -
--------- --------- --------- ---------
1,306,323 1,538,020 795,868 743,026
========= ========= ========= =========
REVIEW OF THE PERFORMANCE OF THE COMPANY AND ITS PRINCIPAL SUBSIDIARIES For the year ended 30 June 1999, the Group's turnover decreased by 25% to $471.7 million as less development units were launched during the year. The only development project launched for sale was Aquarius By The Park. The turnover at the Company level decreased by 54% to $195.7 million due to lower dividend income from subsidiaries as compared to the previous year. The directors reviewed the carrying values of all its residential and commercial properties in the Group's balance sheet as at 30 June 1999 and decided to make an aggregate provision of $145.8 million on these properties. As a result, the Group recorded an operating loss before interest and tax of $70.9 million for the year ended 30 June 1999. The Group's associated companies turned in a loss before tax of $29.6 million. The adverse results were due to provisions made by these companies for their investment properties in Hong Kong and development properties in China. Despite the losses, the Group has a tax charge of $22.6 million as there is no group tax relief in Singapore. As a result, the losses incurred in some subsidiaries are not available for offset against income of other subsidiaries. The extraordinary items included losses from sale of a long-term investment and sale of an investment property by subsidiaries, sale of an associated company and provision for diminution in value of a long-term investment by a subsidiary. The Group's loss after tax and extraordinary items attributable to members of the Company is $179.4 million against $23.3 million in the previous year. An independent valuation for the Group's investment properties was carried out as at 30 June 1999. An amount of $77.8 million was written down in the Group's revaluation reserves. After the write-down, the Group has a surplus of $218.1 million in its revaluation reserves. The net tangible asset backing per share has decreased from $4.08 last year to $2.78 this year. The decrease is attributable to provisions made for the Group's development and investment properties and the enlargement of the share capital base arising from the placement of additional shares and conversion of the non-redeemable convertible cumulative preference shares to ordinary shares. CURRENT DEVELOPMENTS During the year, the Group sold all its residential units which had been launched for sale except for 48 unsold launched units in Aquarius By The Park. To build up its landbank in well-located residential areas, the Group had acquired a 40% interest (subject to the necessary approvals) in a prime freehold site at No. 1 Ladyhill Road, a freehold site at Katong Park Hotel and the leasehold service apartments at No. 21 Leonie Hill for redevelopment. The Group has been divesting its interests in non-strategic assets so that financial resources could be reallocated towards the Group's core property business. During the year, the Group sold a shop unit in Lucky Plaza, 5 terrace factories at Paya Lebar Road and 2 office units at Parkway Parade. Subsequent to year end, the Group disposed of 2 storeys of retail space at Kovan Centre and another 3 office units at Parkway Parade. The Group has also divested its entire interest in the subsidiary that owns Century Square, a retail mall at Tampines Central, through asset securitisation. In August, 1999, the Group sold down 22.63% from its investment in Sea View Hotel Limited. Certificates of Statutory Completion were obtained for Westville, Maysprings and Tanglin Regency in March 1999 and for Stratford Court in June 1999. YEAR 2000 COMPLIANCE PLAN UPDATE The Year 2000 ("Y2K") issue originated from the design limitation in information technology products, i.e. computer systems and equipment with embedded electronic chips, where only the last two digits rather than the entire four are used to define the applicable year. As a result, these time-sensitive programs may recognise a date using "00" as the Year 1900 rather than the Year 2000. This could cause a system failure, miscalculations or equipment malfunction, resulting in possible disruptions to processing business transactions on or beyond the first day of the Year 2000. Through a designated team, the Group has completed the validation, testing and implementation of its mission critical systems (including hardware and software) for Year 2000 Compliance. The Group has also communicated with all major business partners, suppliers and customers to ensure that their systems are Year 2000 ready. However, due to the unpredictable nature of the Year 2000 issue, contingency plans have been established and tested to minimise any potential impact to its business operation. The total cost of the Y2K project is not expected to exceed $1 million. The expenditure of acquiring hardware and software will be capitalised as fixed assets while other costs of the project will be expensed off as and when incurred. COMMENTARY ON CURRENT YEAR PROSPECTS The Singapore economy is benefiting from the greater optimism in the region as regional economies are on the path to recovery. This has resulted in an improved sentiment in the local residential market. With this positive outlook, we expect the Group's performance for the current financial year to be better than that of the last financial year ended 30 June 1999. DIVIDEND (a) Present Period
(b) Previous Corresponding Period
(c) Total Annual Dividend
1999 1998
$ $
Ordinary 13,373,000 10,841,000
Preference 8,393,000 7,400,000
----------- -----------
Total: 21,766,000 18,241,000
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10 September 1999 |
By Order Of The Board
Doris W. N. Wong
Company Secretary
Hong Kong, 10 September 1999
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