Dear Shareholders,
THE YEAR IN RETROSPECT
Capitalizing on the buoyant conditions in FY2010, the Group delivered a 39.1% increase in revenue, which rose from US$356.9 million to US$496.4 million. Corresponding to our strong sales performance we closed the year with a net profit after tax of US$2.6 million.
The higher level of business activities this year also gave rise to higher operating expenses, which rose by 14.4% from US$28.4 million to US$32.5 million, reflecting our higher working capital needs. Nonetheless, despite the improved business climate, our management continues to exercise caution and prudence in the management of our operating expenses.
In view of our improved performance, the Board recommends a dividend of 0.3 Singapore cent per ordinary share, subject to the approval of shareholders at the forthcoming Annual General Meeting.
OUR ROAD MAP
Building Our Pan-Asian Distribution Network
The last economic crisis brought significant changes to the global business arena. Risk management and business consolidation topped the list of priorities as organizations re-orientated and realigned resources to accommodate the changing operating landscape. In our industry, geographic reach took priority as multinational brands took steps to reduce their distributor population to better focus and manage their resources.
Similarly, our customers have also changed their supplier-selection criteria. Having demonstrated our capabilities over the years, our customers are familiar with the service quality that they can expect from Excelpoint. Recognizing our ability to meet their specifications and requirements, Excelpoint has been selected as the supplier-of-choice by our customers, who like our principals, are also consolidating their operations.
At Excelpiont, our network of more than 25 offices across Asia is a powerful distribution channel. During the economic downturn in the last two years, we have provided our teams with strong training. Today, they are well equipped with the relevant product knowledge to address customers' needs across different geographic markets. Together, we will fulfill our aim to develop Excelpoint into one of the major Pan-Asian enterprises with the ability to bridge Asia with the rest of the world.
Remaining Relevant
Competition has adopted a new face in the 21st century. For us, to support our distribution business, we have developed teams of research and development engineers who create new solutions that in turn create demand for our products. Working closely with our customers, they are able to share and develop new ideas to further improve existing solutions. In recent years, they have also begun working with government research bodies to commercialize technologies in a bid to bring new products and solutions to the market.
Our research and development efforts will increasingly be focused on the healthcare, home-care, power saving, renewable energy and industries that promote environmental friendliness. By harnessing the strengths of the twin functions of distribution and research and development, we have constructed the platform for Excelpoint's future growth. This is the legacy that we are giving to our new generation of leaders who are being trained to lead and eventually assume senor management roles. Having laid the foundation and set the parameters, we can now push the organization ahead with the assurance that the necessary elements for it to grow into an evergreen enterprise are in place.
The Challenges
Recent events around the world will bring new challenges to our business. The tension in Africa and The Middle East, the financial crisis in the European Union, the lagging US economy will continue to hinder global economic recovery. Rising energy and commodity prices will add pressure to inflation that is rapidly galloping across the world. The recent liberalization of the Reminbi, the volatility of global currencies and the possibility of higher interest rates are among some of the challenges that we may encounter. With these concerns in mind, we are cautiously optimistic about our business prospects in the new financial year.
Therefore, it is necessary for us to continue to rationalize our business operations and sharpen our ability to anticipate market changes in a bid to help the Group stay abreast of competition.
IN APPRECIATION
On behalf of my colleagues at the Excelpoint Board, I thank all our customers, principals and shareholders for their patience and their trust in us during the difficult years. To all our bankers, I am grateful for the support and valuable advice that you have given us. Last but not least, to all the staff at Excelpoint, thank you for your dedication and commitment. With your help, I am confident that we will be able to overcome the challenges ahead and help Excelpoint scale new heights.
Yours sincerely,
Albert Phuay Yong Hen
Chairman and Group CEO