The Group managed to retain some stability and maintained its level of business in a challenging year, registering a slight increase in turnover of $0.4 million to $201.4 million. Total margins decreased by $1.1 million as the increase in margins from the slightly higher turnover was offset by a decline in the gross margin rate. Overall operating expenses decreased by $1.2 million during the year.
Group profitability, however, was affected by the substantial decrease in other income by $2.4 million. As announced previously, the Group had entered into a sale and leaseback arrangement for the property in Jurong East in Singapore in FY12. The leaseback period ended on 30 January 2015. The sale and leaseback transaction involved a deferred income of $4.5 million to be amortised over a three-year leaseback period. The amortization at the rate of $1.5 million per year ended on 30 January 2015. The amount of deferred income recognized in FY15 was therefore $1.4 million less than in FY14. As the Group also decided not to remain as the master lessee for the premises at the time of the expiry of the original leaseback period, the Group’s rental income from sub-lessees ceased. In comparison with FY14, rental income decreased by $1.1 million in FY15.
As a result, profit from operations (PBIT) decreased from $5.7 million to $3.3 million, and profit before tax decreased from $4.0 million to $1.1 million.
Details relating to the performance of the business are set out in the Business Review section of this Annual Report.