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Corporate Information
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Chairman's Message
I am pleased to report that in 2007, the Group undertook a strategic decision to capitalise on its property development experiences and successes by including property investment and property development as one of its core businesses. This was approved at the EGM held on 30th November 2007.
Guided by this strategic direction, the Group has secured a property development project in Bangkok, Thailand ("Bangkok Project") in February 2008. The Bangkok Project is a proposed 29-storey residential condominium with about 629 apartments and completion is expected to be in 2010.
Additionally, a mid to long term development project in Yantai ("Yantai Project") is now in the pipeline, which was secured under a collaboration development agreement in July 2007. The Yantai Project is a proposed commercial and residential development, with gross floor area exceeding 1.4 million sqm. It is currently in the designing and planning stage, and is pending for the necessary regulatory approvals.
Details of the Bangkok Project and Yantai Project were previously announced on 18th February 2008 and 11th July 2007 respectively. The construction of Costa Del Sol, a premium residential and commercial development in Zhuhai, PRC (Zhuhai Project) will be fully completed and the residential units are expected to be largely sold by 2008. The commercial properties comprise primarily of a hotel-cum-shops and a club house. The hotel is being furnished into a 4-star, 206 – room hospitality property. The Zhuhai Project contributed positively to the Group's profitability in 2007.
On 28th February 2007, the Group’s education unit, Nanyang Institute of Management (Nanyang), was expanded through the acquisition of the two education units from HEG Singapore Pte Ltd. Following the acquisition and subscription of new shares by HEG Singapore Pte Ltd, details of which were previously announced on 28th February 2007, IPC’s stake in Nanyang has been reduced from 81.5% to 40%. The remaining 60% is owned by HEG Singapore Pte Ltd and EDB Investment Pte Ltd at 51% and 9% respectively. The expanded entity has been restructured to focus on Tourism and Hospitality, Early Childhood Teachers Training and Business Management programmes, and is operating profitability.
The year 2007 has also brought new developments to the Group’s IT business under ThinSoft (“ThinSoft”). Chief among these was the successful addition of new Vista-based products to ThinSoft’s software suites. As a clear demonstration of its ability to maintain product leadership in today’s highly competitive Information Technology arena, ThinSoft announced the release of its first-to-market WCS-VS in March 2007 and BeTwin-VS products in May 2007, which provide its customers with software operating environments compatible with Microsoft’s new operating system, Vista. Another important development is the continuing efforts by ThinSoft to improve its website in order to reach out to more customers globally. As a result, online revenue has increased, and ThinSoft continues on its profitability path.
The Zhuhai Project and Thin Computing business contributed positively to the Group's overall performance. On a pre-tax basis, the Group recorded a profit of S$1.925 million, a turnaround from a pre-tax loss of S$2.028 million in 2006. Net profit after tax attributable to shareholders for 2007 was S$1.683 million as compared to a net loss of S$3.320 million in 2006.
The Group continues to dedicate itself to prudent asset management. This was reflected in the consolidated Group cash balance of S$45.5 million, as at 31st December 2007, an increase of around S$10 million from the prior year.
FINANCIAL REVIEWS
Group revenue has decreased by 7.5% to S$27.73 million for the period ended 31st December 2007, when compared to S$29.986 million recorded for the same period of the previous year. The Group’s IT business, Thin Computing, accounted for approximately 12% of Group revenue, while the remaining 88% was generated bymainly from the residential and commercial property development project in Zhuhai, PRC (“property development project”).
The decrease in Group revenue was attributed to:
1) A decrease of about 6% in sales from the property development project; and
2) A decrease of about 19% in sales from Thin Computing business, which was attributed to lower sales of upgrade kits and vertical market solutions, despite an Increase of software sales of 7% for the year ended 31st December 2007.
The Group recorded a gross profit of S$8.803 million, an increase of 668%, when compared to S$1.146 million recorded for the same period in the previous year. The increase in gross profit was primarily attributed to higher margins of the property development project and Thin Computing software products.
Other income of S$1.598 million recorded in the period under review was primarily derived from interest income.
The significant increase in gross profit has enabled the Group to turn in an operating profit from operations before taxation and minority interests of S$1.925 million. As a result, the Group registered an after-tax profit attributable to shareholders of S$1.683 million for the year ended 31 December 2007.
CORPORATE OUTLOOK AND STRATEGY
The Group expects continued contributions from the Thin Computing business and the residential and commercial property development project in Zhuhai, the PRC, which will be fully completed in FY08.
In addition, the Group will execute the development plan for the Bangkok Project and continue to carry out the necessary design and planning for and seeking regulator approvals on the Yantai Project.
With the net cash on hand, the Group will seek out investment opportunities, in particular property projects in the region, that will synergise with the Group’s development objective, enhance growth and shareholder value.
APPRECIATION
I would like to acknowledge the dedication of our staff and the continued support of our business partners and shareholders over this period. I would also like to express my sincere appreciation to each of these groups for their contributions.
As a token of appreciation to our shareholders, the Group has recommended a dividend payout of 0.25 cents per share, subject to approval at the Annual General Meeting.
Thank You.
Patrick Ngiam Mia Je
Chairman & CEO
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