05
FRENCKEN GROUP LIMITED
ANNUAL REPORT 2014
CHAIRMAN’S STATEMENT
It proved to be a challenging year for the Group and one
that we will remember with immense sadness due to the
demise of Mr Gooi Soon Hock, our Executive Director and
President, on 30 December 2014. Being his fellow co-
founder of our Group, Mr Gooi was not only my long-time
business partner but also a close and dear friend.
An extraordinary entrepreneur with integrity, passion and
vision, Mr Gooi was a man who commanded great respect
in the manufacturing sector. In spite of his demanding work
schedule, he was always able to draw a fine line between
his business and private lives. Mr Gooi’s devotion to his
family was inspiring while his determination to honour
business commitments was highly exemplary.
Over the past 35 years, Mr Gooi succeeded in overcoming
many challenges in his drive to build the Group and bring it
onto the global stage. He had envisioned an exciting future
for Frencken but sadly, he was not able to see his dream
coming to fulfilment. With this in mind, I wish to call on
everyone in Frencken to honour Mr Gooi’s legacy and work
together towards turning his vision into reality.
Headwinds in FY2014
In terms of the Group’s operating and financial performance,
FY2014 turned out to be a year of two starkly contrasting
halves. Despite the cautious business sentiment at the
start of the year, the Group still managed to deliver a
commendable set of results for the first half of FY2014 with
higher sales and double-digit growth in net profit.
However, the deteriorating macroeconomic environment,
coupled with softer gross profit margin, higher exceptional
charges, foreign exchange loss and challenging operational
conditions at our Penang plant, adversely affected the
Group’s profitability during the second half of the year. As
a result the Group’s revenue grew 6.3% to S$472.7 million
in FY2014 but net profit attributable to equity holders
declined by 36.0% to S$11.4 million.
Nonetheless, the Group remains in a sound financial position. At
the end of FY2014, the Group had cash and cash equivalents
of S$18.8 million while net bank borrowings stood at S$36.6
million. Shareholders’ equity amounted to S$206.9 million,
which is equivalent to a net asset value of 51.2 cents per share
based on the total number of issued shares of 404.5 million
shares. Accordingly, the Group had a net debt-to-equity ratio of
17.7% as at 31 December 2014.
Since listing on the SGX-ST in 2005, the Group has consistently
paid an annual dividend of at least 30%of net profit attributable
to equity holders. Despite the Group’s softer performance in
FY2014, the Board of Directors has recommended to pay a first
and final tax-exempt (one-tier) dividend of 1.0 cent per share,
which translates into a higher pay-out ratio of 35.6%. Upon
approval by shareholders at the forthcoming Annual General
Meeting on 23 April 2015, the dividend will be paid on 15 May
2015.
Dear Shareholders
On behalf of the Board of Directors,
I present to you Frencken Group
Limited’s annual report for the 12
months ended 31 December 2014
(“FY2014”).
