Operational Review

Financial Performance

For the financial year ended 31 March 2023 ("FY2023"), Accrelist Ltd. ("Accrelist" and together with its subsidiary corporations, the "Group") recorded a revenue of S$36.5 million from continuing operations, representing a decrease of S$4.0 million or 10.0% as compared to S$40.6 million for the financial year ended 31 March 2022 ("FY2022").

Continuing operations for FY2023 comprises of aesthetic medical services ("AMS") provided by Accrelist Medical Aesthetics group of companies' ("A.M Aesthetics") and subsidiary, Jubilee Industries Holdings Ltd's ("Jubilee") Mechanical Business Unit ("MBU").

AMS revenue increased by S$3.9 million or 39.0% from S$10.2 million for FY2022 to S$14.1 million for FY2023 due to the continued expansion of the Group's clinic network, expansion of existing clinics to serve more customers and enhanced marketing.

MBU revenue decreased by S$8.0 million or 26.3% from S$30.4 million for FY2022 to S$22.4 million for FY2023. This was attributed to lower demand in plastic injection amidst intense competition from alternative materials. The MBU also faces significant external headwinds amidst a slower-thanexpected economic recovery and softened demand in its key market in China.

The Group's gross profit decreased by S$0.8 million or 12.0% from S$6.7 million for FY2022 to S$5.9 million for FY2023 while gross profit margin declined slightly from 16.5% for FY2022 to 16.1% for FY2023, due to the MBU's negative gross profit margin of 1.8% for FY2023 as compared to a gross profit margin of 2.8% recorded for FY2022. This was mainly due to the tight market supply of resin, a key raw material for the Group's MBU, which was exacerbated by rising inflation.

Other gains for FY2023 amounted to S$3.0 million, reversing the other losses of S$6.3 million recorded for FY2022. The reversal was due to lower impairment loss on intangible assets and office equipment recorded for FY2023 of S$0.02 million as compared to S$4.0 million for FY2022. In addition, this was also attributed to the absence of fair value loss on financial assets, at fair value through profit or loss ("FVPL") for FY2023 and the gain on disposal of financial assets at FVPL of S$1.6 million for FY2023.

Total operating expenses increased slightly from S$11.3 million in FY2022 to S$11.5 million in FY2023. Marketing and distribution expenses increased slightly from S$1.1 million in FY2022 to S$1.2 million in FY2023 in line with increased efforts to enhance brand recognition of AMS through social media marketing. Administrative expenses which mainly related to staff-related costs, increased slightly from S$9.9 million to S$10.0 million for FY2023. Finance expenses which mainly related to interest expense on loans and lease liabilities increased slightly to S$0.3 million in FY2023.

As a result of the above, the Group's net loss from continuing operations narrowed significantly from S$11.2 million for FY2022 to S$2.7 million for FY2023.

Jubilee's Electronic Business Unit ("EBU") was completed on 29 August 2023 following approval by Jubilee's shareholders. In accordance with Singapore Financial Reporting Standards, the EBU's financial performance was presented in the Consolidated Statement of Comprehensive Income and segment reporting section as discontinued operations, separate from the Group's revenue.

Financial Position

The Group's current assets decreased by S$4.4 million from S$57.5 million as at 31 March 2022 to S$53.1 million as at 31 March 2023. The decrease was partly due to the sale of financial assets at FVPL amounting to S$7.0 million. The current and non-current assets of Jubilee's EBU and Honfoong Plastic Industries Pte Ltd, which forms part of the Jubilee's MBU ("HF-MBU"), were presented as "Assets of disposal group classified as held for sale". This was offset by the increase in cash and cash equivalents of S$5.3 million from S$9.8 million as at 31 March 2022 to S$15.1 million as at 31 March 2023 mainly due to proceeds from the sale of the EBU and HF - MBU.

Non-current assets decreased by S$13.2 million from S$20.3 million as at 31 March 2022 to S$7.1 million as at 31 March 2023. This was primarily due to the reclassification of property, plant and equipment as well as intangible assets to disposal group classified as held for sale.

Current liabilities decreased by S$11.0 million from S$42.4 million as at 31 March 2022 to S$31.5 million as at 31 March 2023. This was primarily due to the drop in liabilities directly associated with the disposal group classified as held for sale, namely the Group's EBU and HF - MBU.

Non-current liabilities increased slightly by S$0.3 million from S$2.6 million as at 31 March 2022 to S$2.9 million as at 31 March 2023. This was mainly due to greater borrowings obtained for the purchase of aesthetic machines in line with the expansion of the current A.M Aesthetic clinics and the opening of new clinics.

The Group's working capital increased by S$6.6 million from S$15.1 million as at 31 March 2022 to S$21.7 million as at 31 March 2023.

As a result of the above, the Group's total equity decreased by S$6.9 million from S$32.8 million as at 31 March 2022 to S$25.9 million as at 31 March 2023.

CASH FLOW STATEMENT

Net cash flow generated from operating activities for FY2023 was S$1.5 million, comprising operating cash outflows before working capital changes of S$6.4 million and working capital inflow of S$8.0 million.

The working capital inflow was mainly due to movement in inventory level and increase in trade and other receivables and contract assets of S$9.8 million, offset by trade and other payables and contract liabilities of S$7.9 million.

Net cash generated from investing activities for FY2023 of S$11.3 million was mainly due to proceeds from disposal of financial assets, at FVPL and proceeds from partial disposal of subsidiary of S$8.6 million and S$2.9 million respectively, offset by the purchase of property, plant and equipment of S$1.1 million.

Net cash used in financing activities of S$4.4 million was largely due to repayment of borrowings and lease liabilities, as well as interest paid.

As a result of the above, the Group's cash and cash equivalents increased by S$8.4 million to S$15.6 million as at 31 March 2023.