It is a great privilege to have Mr Goi Seng Hui joined Hanwell Holdings Limited recently as our Non-Executive Chairman. I wish to take this opportunity to welcome him as a board member and look forward to building a professional relationship with him. Mr Goi has a remarkable track record in both business, public as well as community services. We hope to learn and tap into his wealth of experience including his excellent business network to broaden and deepen the Company’s next phase of development.
Most notably, COVID-19 took all of us by surprise, and given its unprecedented nature, the full extent of its repercussion is still unimaginable. Conscious of the impact that our business has on the environment and community, the Group will continue to look beyond its current market, exercise vigilance on its financial and non-financial exposure, leverage more on automation and digital solutions to be manpower-smart whilst focusing on our core competencies.
Apart from keeping a keen eye on our business objectives, we assert safety management measures for everyone to adhere to as our employees carry on with telecommuting. Moving forward, we continue to identify and evaluate areas for improvements to people, process, and technology in terms of striving positive contributions to our local community and sustainability of our suppliers and partners.
In financial year 2020 (FY 2020), the Group achieved a total revenue of S$471.38 million, an increase of 2.23% or S$10.28 million as compared to the financial year 2019 (FY 2019). The increase was due to higher revenue achieved by Singapore Consumer Business, which observed higher demand for its products such as rice and tofu during the year. Additionally, growth in China sector of the Packaging Business (Tat Seng Group) also contributed to the higher revenue in FY 2020. This is driven by higher sales volume of 4.8% as compared to FY 2019 and partially attributed to strengthening of Renminbi. This is offset by weaker performance for the Malaysia Consumer Business which is affected by the Movement Control Order implemented during the year.
Profit before tax was S$40.24 million in FY 2020 as compared to S$ 17.55 million in FY 2019, an increase of 129.29% or S$ 22.69 million. Excluding foreign exchange gain of S$ 0.01 million in FY 2020 and S$ 0.18 million in FY 2019, the profit before tax would be S$ 40.23 million in FY 2020 and S$ 17.37 million in FY 2019.
The Group’s net profit after tax for FY 2020 was S$33.10 million as compared to S$ 11.84 million reported for FY 2019. The net profit attributable to shareholders was S$ 22.24 million for FY 2020 as compared to S$ 6.06 million reported for FY 2019.
Tat Seng Group registered revenue of S$303.1 million in FY2020, representing an increase of 5.0% or S$14.5 million as compared to S$288.6 million in FY2019.
Tat Seng Group’s gross profit increased by 24.7% or S$12.7 million to S$64.3 million in FY2020. This is mainly attributed to higher margin achieved from rationalising its production workflow, reduction in raw material costs and increased of sales volumes.
DEVELOPMENTS IN FY2020
Topseller Pte Ltd (“Topseller”) is a key contributor towards Hanwell’s performance through distributing and developing leading consumer essentials that comprise Royal Umbrella rice, Golden Peony rice, Gitangkim rice, Okome rice, Taj Ponni rice, Taj Basmati rice, Harmuni rice and oil, Golden Circle oil, Soyalite oil, Fortune Tofu and Noodles. Our non-food brands include Promax detergent, Singpo detergent and TP706 dishwashing liquid. Leveraging on our extensive distribution network, our products enjoy strong presence in supermarkets, grocery stores, caterers, institutions, ship chandlers, hotels, restaurants, food courts, hawker centres and online retailers in Singapore.
Separately, Fortune Food Manufacturing Pte Ltd (“Fortune Food”) is committed to remain relevant and competitive by keeping ourselves up to date on everchanging consumer expectations and market forces in our production of premium quality Tofu. This includes R&D efforts focusing to bring more nutritional products to meet our customers’ healthy lifestyle. Recently, Fortune Food launched our Deep Fried Tau Kwa in 350g pack and Food Service pack Tau Kwa in 1.2kg pack for export reaching out to various international markets. These products come with convenient vacuum packaging to ensure freshness, goodness and quality.
Moreover, Tipex Pte. Ltd. (“Tipex”) has successfully established itself as a reputable manufacturer and distributor of tissue paper products in the local market. Household brands under Tipex include Beautex, Mood, Hibis, Comfy and Parity. Tipex also carries a variety of washroom hygiene products, such as cleaning agents and dispensers. In recent years, Tipex has also branched into the household and automobile cleaning industry marketing products through Mr. CLEAN.
This fiscal year in 2020 has been an eye opener on both business and social front. Working with our suppliers, stakeholders, and customers towards a safe and sustainable environment during this pandemic has seen more camaraderie that is intense yet humbling.
We expect the business environment to remain challenging attributable to escalating raw materials and labour cost in a low interest environment. Although competition is rife in the food industries; such industry is also full of potential and opportunities for innovative and nimble players if we can leverage the industry trends and capitalize on the right IT strategy to capture and enlarge our market share.
Although traditional brick and mortar trade continues to make up majority of sales locally and overseas, this has invariably reduced due to a paradigm shift of consumers’ spending pattern towards virtual platforms as global markets continue to transform and reform. Growth will be driven primarily by the expansion of online B to B and B to C, as retailers, wholesalers and suppliers shift their business transactions and consumption patterns towards this channel. Online business has grown exponentially spiraled by progressive consumers’ preference and business partners’ inclination to trade on various e-commerce platforms.
As there remains significant uncertainty over when normalcy can resume given the “new normal” is here to stay in the long run, our business strategy in 2021 would be focusing on incorporating sustainability issues into the formulation of our business strategy and integrating sustainability efforts into our daily operations, production and products’ portfolio with greater diversification whilst exploring more markets to boost our exports and sales; thereby seeking more opportunities to improve our margins.
In this light, we strive to manage costs prudently and effectively so as to keep our pricing reasonable without compromising on the quality of our products.
The Board noted that Dr Allan Yap, our former Executive Chairman, and Mr Kong WeiLi, past Non-Executive and Independent Director have resigned and would like to wish them well in all their future endeavours.
I would like to congratulate Mr Yeo See Liang, who has been promoted from Chief Operating Officer to the position of Executive Director of the Company.*
Most importantly, I wish to thank our customers, business partners, management and staff for their contribution and dedication over the past year; enabling the Group to forge ahead despite current headwinds. Last but not least, I would like to express my appreciation to our shareholders, who have supported us over the years.
Thank you again for the trust you have placed upon us and we certainly look forward to achieving better results in the years to come.
[*Mr Yeo See Liang has ceased as Executive Director and Chief Operating Officer of the Company on 29 April 2021 and 1 June 2021 respectively.]
DR JOHN CHEN SEOW PHUN