ENRA Group Berhad Annual Report 2018

21 A N N U A L R E P O R T 2 0 1 8 RM9.4 mil RM8.9 mil RM11.9 mil RM1.0 mil (RM72.1 mil) (RM2.2 mil) PATAMI FYE 2016 FYE 2017 FYE 2018 Continuing operations Including discontinued operations FYE 31 MARCH 2018 GROUP FINANCIAL POSITION OVERVIEW From a balance sheet and solvency perspective, ENRA remains strong and healthy. The Group’s cash balance decreased from RM64.1 million in FYE 31 March 2017 to RM46.2 million in FYE 31 March 2018 primarily due to continuing repayment of various loans but is expected to increase further due to the completion of the Divestment Exercise. After the completion of the Divestment Exercise, ENRA’s main physical asset would be Portland Chambers where the Group is developing four apartments that are targeting to fetch a GDV of approximately GBP10 million. The net assets of ENRA have reduced slightly from RM152.8 million in FYE 31 March 2017 to RM152.0 million. The Group’s gearing as at 31 March 2018 is a manageable 0.5 times, a slight increase from 0.4 times from the previous financial year due to an increase in borrowings as a result of more active utilisation of trading lines and the progress in the Portland Chamber’s project. The Group’s gearing will reduce to 0.3 times after 31 March 2018 as a result of the proceeds from the Divestment Exercise being partially used to pare down various debts. BUSINESS PERFORMANCE REVIEW PROPERTY DIVISION The Property Division’s FYE 31 March 2018 revenue (RM16.8 million) and operating profit (RM0.5 million) were solely attributable to the continuing sales of Shamelin Star units. Contribution from the Property Division in FYE 31 March 2018 was lower than prior years as Shamelin Star’s progressive revenue and construction progress used to be the largest contributor to the Group’s revenue and earnings. As at 30 June 2018, there remains only 15 unsold units by ENRA. Having achieved more than 96.5% sales for this project, the Board and Management are proud that the Group’s maiden property development is successful despite the soft property market over the past few years. The Management is exploring options to increase the marketability of the remaining units. In FYE 31 March 2018, the Property Division of the Group focused mainly on the continuing development of the Portland Chambers project in Central London - our maiden UK project. It is nearing completion with work primarily focused on finishing and fittings. There were some delays in construction due to the very stringent approval process as a result of the Grade II listed categorisation of the building. As this is our first UK project, we aim to start our UK foray with a successful track record. We expect this project to complete in the second quarter of FYE 31 March 2019 and as such, the revenue and profit will only be recognised in the said financial year. Pending the completion of our Portland Chambers development, there are no other projects currently being undertaken as the Board and Management have taken a careful and diligent approach for the Property Division given the soft property market. Further details of our future plans are discussed further in the “Prospects and Future Strategic Initiatives” section below. MANAGEMENT DISCUSSION AND ANALYSIS cont’d