14 EXCEL FORCE MSC BERHAD Management Discussion and Analysis This Statement contains the Management’s discussion and analysis of the business operation and performance of the Group for the financial period ended 30 June 2023. It should be read in conjunction with the audited financial statements of the Group as set out in this Annual Report. BUSINESS REVIEW EForce is a leading information technology solution provider involved in the development, provision and maintenance of application and system solutions for the financial services industry, specifically the stockbroking companies and investment banks. EForce organises its business activities into three (3) segments. They are: 1. Application Solutions ("AS") for sales of software applications and products on outright purchase basis. 2. Maintenance Services ("MS") for provision of maintenance services. 3. Application Services Provider ("ASP") for provision of application services on monthly recurring fixed and variable charges. The Group's products include CyberBroker Front Office (for client-server, web and mobile-based stock trading system), CyberBroker Middle Office, CyberBroker Back Office (including Custodian and Nominee System), StockBanking System (including Share Margin Financing System) and Fundamental Analysis System. EForce customers require reliable and stable solutions to fulfil their mission critical role as capital market intermediaries. Over the years, EForce has earned a solid reputation in consistently meeting, and at times, exceeding customers' expectations. The Group collaborates closely with customers to continuously assess their evolving business needs and develop good quality applications to fulfil them. REVIEW OF FINANCIAL RESULTS The Group changed its financial year end from 31 December 2022 to 30 June 2023. As such this report covers 18 months period. The change is to avoid the calendar year end peak statutory audit period and for better resource allocation and planning. For the 18 months period to 30 June 2023, the Group recorded total revenue of RM43.4 million, mainly contributed by ASP segment. ASP was 67% of total revenue, which is lower than previous financial years. This is due to continuing headwinds faced by the stockbroking industry as seen in the declining daily average trading volume and value recorded by Bursa Malaysia in 2022 and 2023. Average Daily Value (ADV) (OMT) (RM mil) 1,105 1,545 898 965 2,369 3,545 1,964 2,068 1H 2022 2021 1H 2023 2022 ▼ 17.3% ADV ▼ 41.5% ADV 629 1,334 553 550 635 666 ADV – Foreign Institution Note: a) OMT – On Market Trades b) Retail ADV comprises local, foreign & PDTs ADV – Retail ADV – Domestic Institution 513 553 Source: https://bursa.listedcompany.com/financials.html The Group’s Profit before Tax (PBT) was RM16.4 million and Profit after Tax (PAT) was RM11.8 million. Despite cost inflationary pressure on our profit margin, the Group managed to achieved PAT of 27%. Total assets of the Group stood at RM107.2 million, lower by RM3.1 million from previous financial year. Total liabilities of the Group stood at RM10.2 million, lower by RM0.4 million compared to last audited financial year.
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