Despite the macroeconomic headwinds, the shift to sustainability remains unabated with the rapid development in electrification unlocking business opportunities for the Group.

Dear Shareholders,

Rising geopolitical risks and volatile business conditions continued to have a profound impact on the global economy as businesses grappled with elevated interest rates and inflationary pressures during the financial year ended 30 June 2024 (“FY2024”).

Despite the macroeconomic headwinds, the shift to sustainability remains unabated with the rapid development in electrification unlocking business opportunities for the Group. The proliferation of data-driven technologies such as generative artificial intelligence and machine learning has also propelled the surge in demand for data centres. These key trends could accelerate the rise of the digital economy and create additional growth pathways for the Group.

In this regard, the Group has sharpened our core competencies through strategic innovation and operational excellence to remain competitive and create value for our clients.

Group revenue decreased 4.99% from $421.73 million in the financial year ended 30 June 2023 (“FY2023”) to $400.68 million in the year under review with lower contributions from the Cable & Wire (“C&W”), Electrical Material Distribution (“EMD”) and Switchboard (“SB”) segments. The upturn in the private construction sector in Malaysia and Vietnam as well as higher volumes for non-destructive testing services in the region helped to cushion the impact of the cyclical slowdown in the global semiconductor industry on the overall performance of the Group.

Gross profit decreased marginally from $66.65 million in the previous financial year to $66.43 million in FY2024. However, gross profit margin improved from 15.81% to 16.58%. This was mainly due to the higher margins realised in the C&W and Test and Inspection (“T&I”) segment.

Other operating income increased from $5.00 million to $5.49 million mainly due to the higher foreign exchange gain and higher scrap sales, partially offset by the absence of allowances for doubtful debts written back and the fair value gain on derivative financial instruments (“DFI”) that were recorded in FY2023.

Selling and distribution decreased to $23.02 million due to lower staff and business operation costs, which was in tandem with lower revenue. Administrative expenses increased to $22.46 million mainly due to higher depreciation charges as well as increase in both staff remuneration and expenditure on information technology.

Other operating expenses increased to $4.28 million mainly due to the net impact of fair value loss on DFI recorded in FY2024, reversing from the fair value gain on DFI recorded in FY2023 as well as loss allowance for trade receivables. In addition, other operating expenses included an impairment loss on property, plant and equipment amounting to $0.89 million and impairment loss on right-of-use assets in Cambodia amounting to $1.43 million.

Finance costs increased to $2.26 million mainly due to increase in borrowings and higher interest rates on short-term bank loans.

Share of profit of associates increased mainly due to higher profits reported by the Nylect Group during the year under review.

As a result of the above, the Group’s profit attributable to shareholders decreased to $14.60 million in FY2024.

To appreciate our shareholders for your unwavering confidence and trust, the Board would like to recommend a final dividend of 1.6 cent per ordinary share. Subject to shareholders’ approval at our upcoming annual general meeting scheduled on 29 October 2024, the dividend is expected to be paid out to shareholders on or around 13 November 2024. This will bring the total cash dividend payout for FY2024 to 2.35 cent per ordinary share.

The Board would like to express our heartfelt thanks to Mr Soon Boon Siong, our lead Independent Director, and Mr Lee Fang Wen, for their invaluable contributions and guidance during their respective terms as Non- Executive and Independent Directors since 2012 and 2015. They will be stepping down from the Board at the conclusion of our upcoming annual general meeting to facilitate and support the renewal of the Board. The Group has benefited from their wise counsel and we wish them well in their future endeavours.

Finally, I would like to extend our sincere appreciation to our network of customers, business partners and loyal shareholders for their unflinching support. I would also like to commend our stalwart management team and staff for their dedication and tenacity in the face of the difficult business environment. The Group remains resolute in our commitment to create enduring value for our stakeholders. I believe that we are well positioned to build on our established operating track record to deliver sustainable shareholder value for the Group in the years ahead.

On behalf of the Board of Directors, we thank you and look forward to your continued trust and steadfast support.

Bobby Lim Chye Huat
Chairman