On behalf of the Board of Directors, I am pleased to present the Annual Report and Audited Financial Statements for the financial year ended 31 January 2018 (“FY 2017/18”).
Notwithstanding the challenging market environment, the Group remained profitable for the financial year ended 31 January 2018 and achieved progress in several strategic initiatives it has started since the last financial year.
The Group reported lower revenue of S$14.9 million in FY2017/18, down 18% from S$18.2 million the year before. The decrease was mainly due to the decrease in sales contributed by the wholesale trade sector.
Other income decreased 60% from S$1.2 million to S$0.5 million in FY2017/18, mainly due to the decrease in license fee from the distributors in China.
Marketing and distribution costs decreased 14% from S$7.8 million to S$6.6 million in FY2017/18. The decreases were attributable to the closure of unprofitable outlets.
Administration and other operating expenses decreased 5% from S$2.4 million to S$2.3 million in FY2017/18.
Finance costs decreased 59% from S$131,000 toS$54,000 in FY2017/18, due to lower interest rates and loan balance.
The Group reported profit before tax of S$122,000 for the year ended 31 January 2018, down 26% from S$164,000 a year ago.
As at 31 January 2018, Shareholder's Fund at Group level stood at S$11.0 million, compared to S$10.9 million in FY2016/17.
In FY2017/18, the Group organised several marketing and promotional activities to boost sales in Nature's Farm's retail outlets. Apart from seasonal promotions during festive holidays, it had also scheduled special promotional activities that coincided with the health awareness themes and events carried out by Health Promotion Board. In order to capitalise on the increased number of Chinese tourists in Singapore, Nature's Farm collaborated with a tour agency that specialises in providing high-end tour packages to promote Nature's Farm products among the Chinese tourists.
The membership program of Nature's Farm had been revamped to reward its loyal customers and attract new members. To better engage its members, Nature's Farm held several members-only events on healthy living and awareness on certain health issues, including Ignite Your Health and Manuka-Licious Dinner, where health experts were invited to talk about these topics.
In FY2017/18, Nature's Farm continued to strengthen its brand equity in Singapore and China by reaching out and engaging the online community through social media, including Facebook, Instagram, WeChat and CHNM, a popular news apps among Chinese citizens residing out of China. Interesting digital content on health-related topics were uploaded to these social media periodically to increase brand awareness and exposure.
In FY2016/17, Nature's Farm started selling its products online, both over its own website and over e-commerce platforms including Qoo10, Redmart and Lazada, and the online sales continued to grow in FY2017/18. Nature's Farm is currently revamping its website and plans to launch the new website in the second half of 2018. The revamped website will enable Nature's Farm to facilitate online sales more effectively and provide better customers' experience for its customers.
In November 2017, the Group incorporated a 51% owned subsidiary, Camsing Healthcare (Fuzhou) Medical Instrument Co., Ltd (“Camsing Fuzhou”), in the People's Republic of China. The remaining 49% equity in Camsing Fuzhou is owned by Fuzhou Zhongxing Baokang Trading Co. Ltd, a medical products trading company that has in-depth knowledge and vast business network in China's healthcare industry. The principal activities of this subsidiary are to distribute and trade in medical instrument and medical supplies, and provide logistic services to the healthcare industry in China. The incorporation of Camsing Fuzhou enables the Group to leverage on its partner's expertise and network so as to capitalise on the opportunities in the healthcare industry of China. The Group will continue to explore new business opportunities that are adjacent to its core business so as to achieve sustainable growth in the long term.
The Group achieved progress on all its strategic initiatives in strengthening brand equity, expanding sales channel and building capabilities in supply chain management. The Board remains supportive on the current strategy and is confident that the Group will deliver long term growth and value to all our stakeholders.
On behalf of the Board of Directors, I would like to thank all the staff for their commitment, dedication and contribution to the Group's performance. I would also like to extend my heartfelt thanks to our Board of Directors for their guidance and support.
3 May 2018