ANNUAL REPORT 2015
LETTER TO
SHAREHOLDERS
Dear Shareholders,
A
lthough FY 2015 was not
as tumultuous as the Asian
Financial Crisis and Global
Financial Crisis, it was nevertheless
a challenging year for the Group.
The ripple effect of the deceleration
of China’s rampant economic
growth impacted strongly on
Asia and around the globe.
Free-falling
commodity
prices
continued to dampen resource-
based economies. This resulted in
weakening local currencies vis-à-vis
the Singapore Dollar (“SGD”).
The above challenging conditions
dampened our growth in FY2015
resulting in a Group total turnover
increase of 0.7% reaching SGD 292.5
million as compared to SGD 290.6
million in FY2014. A higher increase
in Group total turnover would have
been reported had it not been
for the marked weakening of the
Malaysian Ringgit, South African
Rand, Indonesian Rupiah and
Australian Dollar against the SGD
as overseas sales in local currencies
are converted and consolidated in
SGD.
Gross profit for the Group was
lower at $64.5 million in FY2015
as compared to $66.2 million in
FY2014 due to the aforementioned
challenges. As a result, gross profit
margin for FY2015 was slightly lower
at 22.1% as compared to 22.8% in
FY2014 with net profit for FY2015 at
$1.7 million.
We were however able to reduce
operating expenses by 1.9% to
$62.0 million in FY2015 compared
to $63.2 million in FY2014 due
to lower allowance for doubtful
debts, allowance for inventory
obsolescence and rental expenses
offset by higher depreciation,
salaries and marketing costs.
BUSINESS PROSPECTS
Looking ahead, the Group will focus
on its core business of distribution
in the South East Asia region, where
the bulk of our distribution centres
and our wheel factory are based.
We will continue to grow our network
of dealers which currently stands at
approximately 7,000.
South East Asia remains the
Group’s core region, contributing
about 83% of total Group revenue
while manufacturing of wheels
accounted for 13%. Though
economic conditions remain
challenging, there are still
opportunities which can be tapped
on for the Group’s long term growth.
Stamford Tyres will continue to:
• Expand our dealers network,
particularly in the South East Asia
region
• Widen product range and
offerings
• Focus on our value-added
services at our retail chain and
truck tyre centres
• Expandour total tyremanagement
services for our commercial fleet
and earthmover market segments
We will also continue to work with our
principals to improve both product
and pricing support to counter the
competition we are facing in some
markets. As a result of our long-term
partnership with Sumitomo Group,
today, we hold the distribution rights
to Falken Tyres in selected territories
in South East Asia, Indian Ocean,
Pacific Ocean and Africa which
will be expanded upon as well as
tapped-on to harness the massive
potential in our joint venture in India.
In addition to our distribution
centres, our export network for
proprietary brands – Sumo Tyres,
Sumo Firenza and SSW wheels -
spans over 90 countries including
Eastern and Western Europe, Africa,
Latin America and the Middle East.
This allows us to optimise global
opportunities and minimise the
impact of any downturn in any one
particular region in the world.
2
Stamford Tyres
prides itself as
one of the largest
tyres and wheels
distributors in
the region and
we will continue
“Building on
Our Extensive
Network”
BUILDING ON OUR EXTENSIVE NETWORK
