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Beyonics records FY2003 operating profit of $24.5m on turnover of $554.8m
One-time goodwill charge of $10 million reduces net profit to $11m
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Proposes 5-for-2 share consolidation
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To take 20% equity stake in SGT
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SINGAPORE – 30 September 2003
- Mainboard-listed Beyonics Technology Limited ("Beyonics"), a leading integrated manufacturing services provider, today announced its financial results for FY2003 and a share consolidation exercise aimed at making its shares more attractive to potential institutional investors. It is also taking a 20% stake in a manufacturer of non-electrical or non-electronic engineering and scientific instruments.
For the financial year ended 31 July 2003, Beyonics recorded a 6.2% increase in operating profit to $24.5 million, from $23.1 million previously. This was despite a 9.8% decline in sales turnover to $554.8 million, from $615.2 million previously, reflecting better margins due to better operational efficiencies.
The decrease in revenue was mainly due to lower average material prices and electronics products prices, and to a lesser extent, the slower business environment due to the Iraqi conflict, terrorist activities in Southeast Asia and the outbreak of SARS.
Commenting on the results, Mr Goh Chan Peng, Chief Executive Officer of Beyonics said, "Despite the global uncertainties of war and SARS over the past year, we are pleased to have achieved a good level of profitability. Our operating margin has improved to 4.4% from 3.8% previously as a direct result of our cost efficiency measures and productivity programmes implemented over the last three years."
During the period under review, net profit attributable to shareholders declined 38.5% to $11.1 million due mainly to a one-time write-down of goodwill of $10 million resulting from its recently-completed merger with Flairis Technology Corporation Ltd ("Flairis").
The write-down was made due to an additional amount of $10 million of goodwill resulting from the application of Statement of Accounting Standard 22 (now known as Financial Reporting Standard 22). Beyonics has stressed that the additional amount of goodwill of $10 million was not reflective of the commercial agreement or intentions of Beyonics and Flairis to the merger and does not represent any future economic benefits. Beyonics had earlier made an announcement regarding this write-down of goodwill on 25 August 2003.
Excluding this one-time write down, profit attributable to shareholders for the financial year ended 31 July 2003 would have increased by 17.1% to $21.1 million, translating into basic earnings per share of 2.36 cents.
During the year, the Group's Precision Engineering Division recorded a higher turnover which rose 9.7% to $125.2 million. This was due mainly to the higher production as its Thailand plant commenced operations in December 2002.
The Contract Manufacturing Division saw a decrease in turnover of 12.6% to $411.9 million due to a combination of lower average selling prices of electronics products as a result of lower average material prices, slower and lower demand from new customers due to the uncertain economic environment.
Fixed assets in the Group increased by $88.8 million largely due to fixed assets of $14.5 million acquired through the acquisition of Beyonics China (Holdings) Pte Ltd which has operations in Suzhou and Nanjing, purchase of machineries of $14.4 million for its operations in Malaysia and Thailand and fixed assets of $68.6 million acquired through the recent merger with Flairis.
"We have had a very busy year," said Mr Goh. "We set up operations in Thailand for our Precision Engineering Division; acquired established plastics injection molding operations in China to strengthen our plastic injection molding capabilities, and recently completed our merger with Flairis."
"We are cautiously optimistic that with these initiatives and development coupled with the Group's close customer relationships, established reputation as a high quality contract manufacturer, stronger financial position and continuing focus on cost efficiencies, productivity and strategic partnerships for growth, the Group is well positioned to face the challenges ahead."
Directors are proposing a gross first and final dividend of 4% per share.
Proposed Share Consolidation
Under the proposed share consolidation, every five (5) issued and unissued ordinary shares of $0.10 each will be consolidated into two (2) shares of $0.25 each. Based on the current outstanding shares, this will result in the reduction in issued shares of the Company to approximately 455 million shares of $0.25 each from approximately 1.138 billion shares of $0.10 each. The authorised and paid up capital remains the same at $200 million and $113.8 million respectively.
Giving its rationale for the share consolidation, Beyonics believes it will be beneficial to the Company and its shareholders for the following reasons :-
 it may increase the profile of the Company amongst institutional investors;
it may make the Company's shares more attractive to such institutional investors;
and
thus increase interest in the Company's shares
The share consolidation will not involve the diminution of any liability in respect of unpaid capital or the payment to any shareholder of any paid-up capital of the Company and has no effect on the shareholders' funds of the Company and its subsidiaries.
Shareholders are also not required to make any payment to the Company in respect of the share consolidation.
However, shareholders should note that there can be no assurance that the above benefits can be achieved as a result of the share consolidation, nor is there assurance that such a result can be sustained in the longer term. In the interests of shareholders and the Company, Directors says the share consolidation should be effected as soon as practicable.
The share consolidation is subject to the approval of the SGX and shareholders at an EGM to be convened in due course.
20% Equity Stake in Scientific Glass Technology Singapore Pte Ltd
Beyonics also announced today that it has entered into a shareholders agreement to acquire a 20 per cent equity stake in Scientific Glass Technology Singapore Pte Ltd ("SGT"). SGT, incorporated in Singapore, is a manufacturer of non-electrical or non-electronic engineering and scientific instruments.
As part of the agreement, Beyonics has the exclusive manufacturing rights for all projects secured by SGT. This investment forms part of the Company's business strategy to enter into strategic partnerships with existing customers.
The transaction is not expected to have any material effect on the net tangible assets per share or the earnings per share of the Company for the current financial year ending 31 July 2004.
# # # About Beyonics Technology Limited
Mainboard listed Beyonics Technology Limited was founded in Singapore in 1981 and has since established itself as a significant player in the electronics landscape in Singapore. Its core businesses comprise Contract Manufacturing, Precision Machining, Precision Plastic Molding and Metal Stamping.
The Group, which aims to be the industrial leader for the provision of integrated manufacturing services, counts among its key customers, multinationals such as Seagate Technology, Matsushita/Panasonic, Hewlett Packard, Quantum, Hauppauge, IBM and Baxter. It currently has manufacturing facilities in Singapore, Malaysia, Indonesia, Thailand and China. For more information, visit
www.beyonics.com
Submitted by Tay Peng Huat, Company Secretary on 30/09/2003 to the SGX
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