CEO's Statement
 Dear Shareholders,
On behalf of the Board, I am pleased to
present the Group’s Annual Report for the
financial year ended 31 December 2006.
For the year under review, Novena Group’s
turnover increased by 10% from S$70 million
to S$77 million. The profit before tax for the
year increased by 86% from S$2.13 million
to S$3.97 million as compared to prior year.
The improvement in revenue and profit was
largely due to a general improvement of the
existing businesses and the incorporation
of the full year results of a new subsidiary
Chuan Seng Leong Pte Ltd acquired in
2005 and to a write back of impairment loss
on property of S$0.72 million.
On 21 February 2007, the company announced
the decision of its Board of Directors to divest
its furniture business to TT International Limited.
The Board has considered several strategic
options for the growth of its furniture business.
One of these options was to continue to grow
the furniture business. However, such growth
would require expansion of its distribution
network both locally and the development
of an overseas distribution arm. Currently,
the furniture business has minimal oversea
presence. This strategy, which would entail
significant risk, human resource investment
and capital with a disproportionate uncertainty
of a good return commensurate with the risk.
The proposed divestment offers the Group
an attractive premium to the net tangible
asset value of the furniture business. In
addition, the Company has also entered
into separate subscription agreements
with TT International to subscribe for
additional shares. Upon completion of the
proposed transactions the Group would
emerge holding approximately 16.7% of the
enlarged share capital of TT International.
TT International is a leading Singapore-based
player in the global trading of
consumer electronics and household
appliances, including its own house brand
AKIRA, sells such products to over 60 countries worldwide. It has an established
network in emerging markets particularly
in South East Asia such as Indonesia,
Malaysia and Vietnam. It also has proven
strengths in brand building and distribution.
The proposed divestment will give the
Group an opportunity to participate
and leverage in the future growth
of TT International’s business via its
shareholding. The proposed divestment is
due to be completed in the second quarter
of 2007.
Novena Group will continue to grow its
beauty division under its wholly owned
subsidiaries Beaute Spring Pte Ltd, Niclas
International Pte Ltd, Fasta International Pte
Ltd and B.S.P. Global Pte Ltd, as well as
its interest in the distribution of FMCG (fast
moving consumer goods) products through
its 80% owned subsidiary, Chuan Seng
Leong Pte Ltd.
The retail industry remains a challenging
environment notwithstanding the
improvement in the economy. In our ongoing
process of expansion of the beauty division,
the Group remains committed to sourcing for products of the highest quality for our
customers. We will continue to strengthen
our branding and retail concepts, and widen
our range of beauty products. Moving
forward, the Group intends to source for new
businesses that will create good value and
benefit the shareholders and the Company.
As in previous years, community
development and charity efforts continue to
be one of the key priorities in the realization
of our values in being creative, sincere and
caring. We believe in making a difference
in people’s lives. Knowing that all it takes
is a little care and concern, we hope that
our efforts will go a long way in making a
difference in the lives of each and every
underprivileged individual we touch.
During the year, the Group contributed
approximately S$192,000 in cash and kind
to various charity events and organizations.
I am pleased to inform that the Board has
recommended a first and final dividend
of 1 cent per ordinary share. In addition,
I would like to express my heartfelt gratitude
to all our loyal customers in supporting our
brands in both the beauty and furniture
segments as well as to Board of Directors
and shareholders for their commitment and
support this past year. Last but not least,
a big thank you for the contributions and
support from all my staff and business
associates. I look forward to your continued
support for the group in the year ahead.
Thank you for your continuous support.
Toh Soon Huat PBM
Acting Chairman &
Chief Executive Officer
|
