Latest / Investor Exchange / Camsing Healthcare: Q1 FY2026 Financial Results

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Camsing Healthcare: Q1 FY2026 Financial Results · Investor Exchange

• 0:02
  Time for another Investor Exchange podcast. Here are your hosts, Matt and Sally.
• 0:08
  Welcome back to The Deep Dive. Today, we've got the latest numbers from Kamsing
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  Healthcare Limited. You sent over their Q1 results, right?
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  For the three months ending April 30th, 2025.
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  That's right. It's the start of their fiscal year, 2026. So our first look at
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  how things are shaping up this year.
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  And these are the unaudited figures, yeah. Still gives us a pretty good picture, though. Exactly.
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  Unaudited, but it's the official release, comparing this quarter to the same time last year.
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  Plenty to dig into. Okay, let's dive in. So first thing, revenue.
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  Looks like it's up. Yep. Top line saw a bump, up 17%. Went from about $1.07
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  million last year to S1.25 million this quarter.
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  17%. Sounds decent on the surface. It does. But, you know, the devil's in the details, as always.
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  Where did that growth actually come from? Right, because when you break it down,
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  it's not quite what you might expect.
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  Not at all. Their main business, the sort of traditional retail and online sales, that actually dropped.
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  Dropped? By how much? Quite a bit. It went from over a million dollars last
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  year, S1.05 million roughly, down to S930,000 dollars this quarter.
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  Hmm. So where did the increase come from then, if the main segment went down?
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  Corporate sales. They had a massive surge there.
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  Last year, it was tiny, like S$20,000. This year, S$305,000. Huge jump.
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  Wow. Okay. So basically, all the growth and then some came from these quarter
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  deals, while the core consumer side weakened.
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  Precisely. And they mentioned the retail dip is largely because they physically
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  closed some stores. Fewer outlets operating.
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  Ah, okay. That context is important. Fewer stores mean lower retail sales. Yeah. Makes sense.
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  So growth driven by corporate, not consumers. Let's talk profit.
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  Or a loss, rather. The loss before tax got smaller.
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  It did. That's one of the headlines here. The loss shrank by 28%,
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  down from $669,000 last year to $480,000 this quarter.
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  Okay, less red ink. That sounds like an improvement. But again,
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  need to ask why, right? Exactly.
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  Did they suddenly become much more profitable in what they sold? Well, no.
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  Actually, the opposite. How so? Their growth profit margin actually got tighter.
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  Their cost of sales, what it cost them to acquire or make the stuff they sold,
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  went up faster than their revenue did.
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  So they made less profit on each dollar of sales compared to last year. Correct.
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  The reason the overall loss improved wasn't better margins. It was significant
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  cuts elsewhere. Cost cutting. Where did they cut?
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  Primarily operating expenses. Things like marketing, distribution costs, those were down.
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  And it ties back to the store closures, you know, less rent,
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  less depreciation on leases they ended. Okay, fewer stores, lower operating costs.
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  That, Twakes. What else? Finance costs, they absolutely limited.
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  Really? Why was that? They received some interest-free loans.
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  That makes a huge difference to the bottom line, obviously.
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  No interest payments or much lower ones. Interest-free loans.
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  That's a significant help. Must be from supportive parties.
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  Likely, yes. The report mentions shareholder support later on, which we'll get to.
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  But there was a slight offset. Admin costs did tick up a bit.
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  Higher payroll, they said. Okay, so recapping the loss. It got smaller,
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  mainly because they slashed operating costs, linked to store closures,
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  and got a big break on finance costs through interest-free loans.
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  Not because the core business suddenly got more profitable per sale.
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  You've got it. The operational efficiency, or lack thereof at the gross margin
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  level, was actually worse.
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  The improvement came from cutting overhead and financing differently.
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  Which brings us to the overall financial health picture. The balance sheet.
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  How's that looking? Yeah, this is where, frankly, the story gets a bit more
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  worrying despite the smaller loss. Oh, so?
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  Their net liability position actually got worse, deeper in the red.
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  Wait, even though they reported a smaller loss for the quarter? Yes.
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  At the start of the period, January 31st, their net liabilities were S3.8 million dollars.
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  By April 30th, just three months later, that had increased to S4.3 million dollars.
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  So the gap between what they owe and what they own widened.
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  Their overall financial hole got deeper. That's a good way to put it.
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  Total liabilities grew faster than total assets. What drove that?
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  Assets falling or liabilities climbing? Or both? It was kind of both.
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  Assets decreased across the board. Property, plant, equipment went down.
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  Depreciation, yes. But also those terminated leases were moving assets.
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  And current assets like cash, receivables, inventory, they all shrank too. Okay. Assets down.
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  What about the other side? Liabilities. Well, some short-term liabilities decreased, which is good.
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  But the big mover was non-current liabilities. That means longer-term debt.
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  Specifically, borrowings increased significantly.
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  That pushed total liabilities up, more than offsetting any decrease in current liabilities.
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  So, smaller accounting loss this quarter, but the underlying balance sheet actually weakened.
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  Net debt or net liabilities worsened. That's not a great combination.
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  It's definitely a red flag. It's just the improved profit and loss figure might
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  not reflect the true underlying financial trajectory, which leads us to cash flow.
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  Right. Cash is king, as they say. How did the actual cash movement look?
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  Forget the accounting profit for a second. And this is probably the most critical
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  point. The cash used in operating activities just running the day-to-day business actually increased.
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  Increased. So they burned more cash from operations this quarter than last year.
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  Significantly more. Last year, same period, they used a $72,000 in cash for operations.
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  This quarter, as $200,000. Wow. So almost triple the cash burn from just doing
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  business, even though the accounting loss looked better.
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  Exactly. That's a really stark contrast.
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  It tells you the business itself, operationally, is consuming cash at a faster rate.
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  The accounting improvements didn't translate into better cash generation, quite the opposite.
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  So where is the money coming from to cover that burn and, well, keep the lights on?
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  They must be getting cash somewhere. Financing activities, that's where the cash came in.
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  Primarily, the report mentions through a loan from a shareholder.
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  Ah, there it is. Shareholder support again. Yes.
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  And the report is quite explicit about this.
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  It says preparing these financials on a going concern basis,
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  basically, assuming the company can continue to operate, relies heavily on this
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  continued financial support from the shareholder.
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  Because without it. Without it, given the net liability position,
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  the operational cash burn, and their low cash balance, there would be significant
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  doubt about their ability to continue.
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  The shareholder loan is essentially plugging the gap right now.
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  Okay, so let's pull this all together. What's the final picture?
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  It's very much a mixed bag, leaning towards concerning, I'd say.
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  You have an improved accounting loss, which looks good at first glance.
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  But that improvement is driven by cost cuts, some potentially temporary,
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  like reduced marketing, and very favorable interest-free financing,
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  not by a stronger core business margin. Correct.
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  And underneath that, you have a deteriorating balance sheet,
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  the net liability position worsening and, critically, an increasing rate of
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  cash being burned by the actual operations.
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  All held together, it seems, by crucial financial support from a shareholder.
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  That's the crux of it. So what's their plan? What does the outlook section say?
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  How do they see things improving? Well, they acknowledge the headwinds.
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  Globally economic uncertainty, potentially hitting consumer spending,
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  maybe supply chain issues lingering.
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  Standard cautious language there. And their strategy to deal with that.
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  It focuses on a few key areas. One, really pushing the retail side through online
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  platforms and other third-party channels, trying to replace that lost physical
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  store revenue digitally.
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  Two, continuing the cost control measures, keep expenses tight.
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  And three, reorganizing their physical footprint, focusing only on profitable
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  store locations while expanding that online presence.
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  They seem to be betting heavily on the shift to digital.
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  So lean into online, keep cutting costs, optimize the remaining physical stores. Pretty much.
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  They express, you know, cautious optimism that executing this strategy will
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  lead to better performance down the line.
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  So there you have it. A mixed bag with improving losses, but a worsening net
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  liability position and continued cash burner from operations tempered by shareholder
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  support and strategic shifts.
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  What stands out to you in their plan relying on online growth and cost cuts,
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  given the broader economic uncertainty they mentioned? Well,
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  the strategy makes sense on paper, right?
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  Shift online, cut costs. But the big question mark for me is the pace.
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  Yeah, can that online growth ramp up fast enough?
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  And can the cost cuts be sustainable enough to actually reverse that negative
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  operational cash flow, especially with the economic headwinds they themselves point out? Right.
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  It makes you wonder how quickly those strategies can translate into sustainable
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  positive cash flow before that shareholder support perhaps runs thin or becomes more expensive.
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  It's a race against time, isn't it? It feels a bit like that, yes.
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  They need those strategic shifts to pay off and potentially quite soon to stabilize
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  the underlying financials.
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  It'll be very interesting to watch their next quarterly report. Indeed.
• 9:04
  A situation definitely worth keeping an eye on. Thanks for breaking that down. My pleasure.