Latest / Investor Exchange / Rich Capital Holdings FY2025 Financial Results

Transcript

Rich Capital Holdings FY2025 Financial Results · Investor Exchange

• 0:00
  Music.
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  A story about a company's year and maybe, just maybe, where it's headed.
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  That's exactly it. It's like the company's report card combined with its future
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  plans all in one document.
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  And our job really is to unpack that. And today, that's what we're doing.
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  We've got the latest results for Rich Capital Holdings Limited.
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  We're looking at their full year, the one ending March 31st, 2025.
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  Yep. And we'll also compare it to the year before and look specifically at that
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  second half performance, too.
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  Right. So our mission for this deep dive, let's be clear, is pretty focused.
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  We want to get the key numbers, understand why they look that way according
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  to the report, and then see what the company is saying about the future.
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  Exactly. It's just sticking to what's in this document, the financial performance,
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  the reasons given, and the outlook.
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  Perfect. So let's start right at the top. Revenue, the money coming in.
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  How did rich capital holdings do in FY 2025 compared to FY 2024?
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  And what about that second half comparison? The revenue numbers.
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  Well, they definitely jump out at you. Oh. Yeah.
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  For the full year, FY 2025, revenue came in at S1.24 million dollars.
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  Now, compare that to FY 2024.
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  It was on 4.89 million dollars then. Wow. OK, hold on.
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  S1.24 million dollars down from almost S5 million dollars. That's that's a huge drop.
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  What's the percentage on that? It's a 75 percent decrease year over year. 75 percent.
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  OK, that's significant. What What about the second half then?
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  Did things improve later in the year or?
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  No, actually the second half, 2H 2025, was even more pronounced.
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  Riven was just $0.35 million.
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  0.35. Yeah, compared to it as $2.07 million in the second half of the previous year, 2H 2024.
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  Okay, so that's what, an 83% decrease just comparing those six-month periods?
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  83%, exactly. So the slowdown really intensified in the latter part of the year.
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  That tells you something fundamental must have been happening with their projects
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  or contracts during that time.
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  Okay, so Topline took a massive hit. How did that affect gross profit,
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  you know, after taking out the direct costs? Well, as you'd expect,
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  gross profit went down substantially, too.
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  For the full year, FY 2025, it was C-Way 0.14 million dollars.
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  That's down from C-Way 0.33 million dollars in FY 2024.
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  So about S-140K versus S-330K, what's that drop? That's a 57 percent decrease for the full year.
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  And for the second half, 2H 2025, gross profit was only $40.06 million,
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  down from 0.15 million dollars in 2H 2024.
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  That's a 58 percent decrease. Okay. Similar percentage drop there,
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  around 57, 58%. Now, the report does say cost of sales also decreased,
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  right? Which makes sense if revenue is down.
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  It did, absolutely. Cost of sales fell quite a bit. From $4.57 million in FY24
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  down to $1.1 million in FY25.
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  Okay. And in the second half, it went from $1.92 million down to $0.29 million.
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  They definitely spent less on the direct costs associated with the work they were doing.
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  But I guess not enough to make up for that huge revenue shortfall when you look
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  at the gross profit figure. Exactly.
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  The cost of sales didn't decrease quite as steeply percentage-wise as the revenue
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  did, so the gross profit margin itself got squeezed.
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  Right. Okay. So, the numbers paint a pretty clear picture.
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  Big declines. Which brings us to the critical question, the why.
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  What does the report actually say caused this?
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  The report's actually very direct about this. If you look at Section F2A,
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  it pins the significant decrease in revenue and cost of sales, primarily on one thing.
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  Which is? That most of the construction projects are almost complete or at the
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  stage of finalization by the end of FY2025.
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  Ah, OK. So it's not necessarily that they failed to win new work during this
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  period. It's more about the cycle of the existing work just naturally coming to an end.
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  According to the report, yes. That seems to be the core reason given.
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  And you see this backed up when you look at the revenue breakdown.
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  Section 5 and 7.1 show it. Construction work, which is obviously their main
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  thing. Yeah. It just plummeted.
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  Revenue from construction went from S$3.66 million in FY24 down to just $3.35 million in FY25.
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  $3.6 million down to $0.35 million.
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  That's over 90% gone. A 91% decrease.
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  91%. And it gets even more stark if you just look at the second half.
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  Construction revenue went from S$1.46 million in 2H24 to $7.02 million in 2H25.
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  0.02 million. You mean...
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  $20,000. $20,000, yeah. Wow.
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  Okay. That's a 99% drop in construction revenue in the last six months.
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  That figure alone basically tells the whole story of the revenue collapse,
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  doesn't it? It really does.
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  It just highlights that their main engine, construction, essentially stopped
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  recognizing significant revenue as those projects wrapped up.
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  Any other areas contribute?
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  Well, subcontracting services also decreased, though not as dramatically,
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  down 26% for the year, 43% in the second half.
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  Consulting was smaller and also down. But yeah, the main story is definitely
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  the construction projects finishing.
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  Okay, so the core business activity wound down its existing contracts.
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  Did they manage costs anywhere else, like overheads, admin expenses,
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  that sort of thing? They did show some cost management there.
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  General and administrative expenses G&A did decrease. Section F.2C points this out.
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  How much by? For the full year, G&A dropped 17 percent from $1.49 million down
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  to S.1.23 million. And in the second half, the savings were a bit more pronounced, down 26 percent.
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  From $6.86 million to $6.94 million.
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  Okay, 17 percent for the year, 26 percent in the back half.
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  What did they cut specifically, does it say? The report mentions lower legal
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  fees as a main factor for the year. And some staff cost savings.
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  For the second half, it also mentions currency differences related to some foreign
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  subsidiaries they discontinued playing a part. Right. And other income.
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  Any movement there? It also decreased slightly, but it's a much smaller number overall.
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  Marginal change, really. So, okay, they trimmed admin costs,
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  which seems like a sensible move given the revenue situation.
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  But even with those savings, what did the bottom line look like?
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  Were they profitable or still in the red?
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  Despite those G&A savings, the group still reported a net loss for the year.
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  Still a loss. Okay, how did it compare to the previous year's loss?
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  It actually improved slightly.
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  The net loss for FY 2025 was $1.07 million.
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  Okay. That's compared to a loss of S1.14 million dollars in FY 2024.
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  So they lost just over a million dollars this year, but that's slightly less
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  than the 1.14 million they lost last year.
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  So what's that, a 6% improvement in the loss amount? Exactly,
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  a 6% smaller loss for the full year.
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  And for the second half, the improvement was a bit better, proportionally.
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  The loss was $4.57 million in 2H2025 compared to $4.66 million in 2H2024.
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  That's about a 13% improvement for that six-month slice. Okay.
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  And I assume no income tax paid given the losses. Correct.
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  Section 8 notes no tax expense because, well, they didn't have profits to tax.
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  Makes sense. And for the shareholders, the owners of the company,
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  how did the loss attributable to them look?
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  Very similar trend. The loss attributable to owners was $1.11 million for FY2025.
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  Again, slightly better than the S$1.14 million loss in FY 2024.
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  Okay. And on a per share basis, does that loss translate differently when you
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  divide it by the number of share? Not really for the full year.
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  Section 9 shows the loss per ordinary share. Basic and diluted,
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  it stayed flat at negative 0.015 Singapore cents per share for both FY 2025 and FY 2024.
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  So same loss per share year on year? For the full year, yes.
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  For the six-month periods, there was a very slight improvement.
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  From negative 0.009 cents in 2H2024 to negative 0.0008 cents in 2H2025.
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  But overall, the per share impact from continuing operations didn't change much
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  despite the slightly smaller total loss.
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  Got it. Okay, that covers the income statement, the flow over the year.
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  Let's shift to the balance sheet now, the snapshot. What the company owned and
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  owed at that specific point, March 31st, 2025.
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  How did that change from the year before? Right. The statement of financial
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  position in Section B, it basically shows a smaller company overall,
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  which, you know, lines up with the lower activity levels we've been talking about. Smaller how?
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  Total assets decreased pretty significantly. They went from $6.81 million down to $4.69 million.
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  OK, that's a drop of over S2 million dollars in assets. What about the other side, liabilities?
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  Liabilities also decreased. Total liabilities fell from S2.77 million dollars
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  to S1.72 million dollars.
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  So that's a reduction of just over S1 million dollars there.
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  So assets down by $2.1 million, liabilities down by about $1 million.
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  Where did the biggest changes happen on the assets side?
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  Mostly in current assets. They dropped from S$6.60 million to S$4.56 million.
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  And within that, a couple of key lines really reflect those finishing projects. Like what?
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  Contract assets, for one, they decreased from S1.56 million dollars to S1.32 million dollars.
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  And section F.2e explains this is mainly because, well, most of that work represented
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  by contract assets got billed out during the year as projects finished.
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  Right. So contract assets is work done but not billed yet.
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  That decrease means they finished it, billed it, presumably it moved to receivables
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  then. Exactly. Or was collected. It shows progress.
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  And related to that, trade and And other receivables also went down from S1.39
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  million dollars to C1.84 million dollars.
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  Section F.2S says this is mainly due to just lower overall billings because
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  less work was happening towards the end.
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  Less work to bill for, so less money owed by customers at year end. Makes sense.
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  Anything else major on assets? Cash. Cash and cash equivalents decreased.
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  They dropped from 3.65 million dollars down to 2.41 million dollars.
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  We'll probably touch on that more with cash flow. Yeah, definitely.
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  Okay, liabilities then. Where do they reduce what they owed?
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  Again, and mostly in the short-term current liabilities. They fell from S2.68
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  million dollars to S1.69 million dollars.
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  A big chunk of that was trade and other payables. Money owed to suppliers and
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  subcontractors? Right.
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  That dropped from S2.63 million dollars to S1.64 million dollars.
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  Section F.2H links this to lower accrued project costs being billed,
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  and presumably paid off as projects were finalized.
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  So as they finished work and billed clients, they also settled up their own
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  project-related bills.
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  So paying off suppliers for the completed work. What else in liabilities?
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  Lease liabilities also decreased, both current and non-current.
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  But that was mainly just due to making the regular scheduled repayments during
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  the year. That's an F.2G. Okay.
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  So the shrinking balance sheet really does just mirror that operational slowdown.
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  Less ongoing work means fewer related assets and fewer related liabilities.
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  How did this all impact the book value, the shareholder's equity?
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  Shareholder's equity attributable to the owners took a hit. It decreased from
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  S2.96 million dollars down to or 1.86 million dollars over the year.
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  That's about an S1.1 million dollar drop. Why?
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  The report is clear in F.2. It's mainly due to the net losses recorded during the year.
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  Every dollar loss basically comes straight out of equity. Right.
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  And that means the net asset value per share also decreased.
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  It did. Section 9 shows it went down from 0.04 Singapore cents per share to
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  0.03 Singapore cents per share. Okay.
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  Snapshot taken. Now, cash flow. The balance sheet shows the position,
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  but cash flow shows the movement, the actual cash coming in and going out.
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  How did operations affect cash during FY 2025?
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  Right. Section D, the cash flow statement. This is really interesting.
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  For operating activities, the group actually used S1.19 million dollars in cash during FY 2025.
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  Used S1.19 million dollars. How does that compare to the year before? It's a big difference.
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  In FY 2024, they only used about $7.13 million from operations.
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  Wait, so even though activity was way down and costs were lower,
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  they burned through more cash from just running the business this year?
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  Those seem counterintuitive at first glance, yeah.
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  They actually had cash used in operations before accounting for working capital
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  changes, about $1.01 million.
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  But then, the changes in working capital were also negative,
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  using up another $7.2 million.
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  Think about what happens when projects wind down.
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  You're collecting cash from past receivables, which is good. Right.
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  Cash in. But you're also likely paying off final supplier bills,
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  maybe accrued costs related to those finished projects, which is cash out.
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  And crucially, you're not generating as much new work. So fewer new receivables
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  and potentially lower advanced payments coming in.
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  Okay. So the net effect of all those working capital shifts,
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  receivables collected, payables paid, less new stuff coming in,
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  was actually a cash drain in this final phase.
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  It seems so. The report shows a net outflow of S1.21 million dollars just from
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  those working capital adjustments.
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  So that, combined with the operating loss before those changes,
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  leads to the total S1.19 million dollars cash used in operating activities.
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  It suggests settling up the old business costs more cash than they collected
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  during that specific period.
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  That makes more sense now. It's the cash reality of winding things down.
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  What about investing? Did they spend money on equipment or long-term assets?
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  Virtually nothing in FY 2025.
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  Cash used in investing was zero. That compares to FY 2024 when they spent about
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  $80,000 on plant and equipment.
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  So, yeah, no significant capital spending this year. And financing,
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  debt, dividends, anything like that. There was a small outflow.
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  Cash used in financing activities was $0.05 million, so about $50,000.
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  Section FPOT 2J says this was mainly just repaying lease liabilities. Okay, so summing it up.
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  Burned over a million from operations, spent nothing on investment,
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  paid back a tiny bit on leases.
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  What's the net effect on their catch pile? The overall result was a net decrease
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  of S1.24 million dollars in cash and cash equivalents during FY 2025.
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  Okay. Which brought their cash balance at the end of March 2025 down to S2.41 million dollars.
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  Remember, they started the year with S3.65 million dollars.
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  So they burned through roughly a third of their starting cash in one year,
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  mostly through operations. That definitely underscores the pressure they were
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  under. Okay, So that's the past year.
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  The good question now is what's next? What does the report say about their outlook FY2026?
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  The outlook section, well, it uses some interesting phrasing.
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  They start by saying the group has a cautiously optimistic outlook for the real estate market itself.
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  Cautiously optimistic. OK. Yeah. Optimistic, but with a but. Exactly.
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  And the but is the context they provide. High interest rates and a slower global
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  economic outlook. So, they see potential, maybe, but the environment is tough. So, what's the plan?
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  They say management will keep monitoring trends, looking for new opportunities,
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  and they specifically plan to identify potential construction projects,
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  both public and private sector.
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  Okay, so they are looking for new work to replace what finished. They say they are.
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  And this is the crucial bit that follows immediately. They say that because
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  of the current industry environment, they've decided to adopt a cautious approach
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  when they evaluate and select these potential projects. A cautious approach. Okay.
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  And what does that cautious approach mean for their expectations?
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  It leads directly to this statement, and it's very explicit.
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  The group is expected to book in lower revenue in the year ending 31 March 2026.
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  Lower revenue again next year. Wow, that's quite a statement,
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  especially right after saying they're cautiously optimistic about the market.
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  How do those two things fit together?
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  It does seem like a bit of a contradiction, doesn't it? They see potential out
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  there, but their own strategy is so cautious that they expect their own slice
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  of that market potential to shrink further.
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  So what could that mean? Are they just being super picky about what jobs they
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  take, maybe holding out for much better profit margins or lower risk?
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  That seems like a reasonable interpretation. It suggests they're not just going to chase any revenue.
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  Maybe the current industry environment makes many available projects unattractive
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  from a risk or profitability standpoint.
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  So they're willing to accept less work overall while they wait for or search
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  for the right kind of projects that fit their cautious criteria.
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  That's a really important nuance.
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  It's not just about market conditions, but their strategic response to those conditions.
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  Did the report mention any other actions or decisions that give clues about their future strategy?
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  Yes, actually. There's a key piece of information under subsequent events in Section 16.
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  This is stuff that happened after the financial year ended on March 31st. Okay, what happened?
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  On May 13th, 2025, the company got rid of its entire stake in its subsidiary
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  called Rich by Tamteat LTD and its subsidiaries.
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  Got rid of it. How? Sold it. Disposed of it, yes.
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  For a nominal consideration of F's $1. $1. Okay.
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  Selling a subsidiary for $1 usually means it wasn't exactly a star performer, right?
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  Maybe it was losing money or they just wanted to exit that particular area.
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  That's typically the implication, yes. Yes.
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  Getting rid of it simplifies things, stops potential ongoing losses,
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  lets them focus elsewhere.
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  While the report doesn't spell out the exact reason, it's definitely a strategic
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  move to streamline or restructure the group, maybe shedding non-core parts as
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  they navigate this period.
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  Yeah, that fits the cautious theme, focusing resources, anything else related
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  to resources, like dividends.
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  Spot on. The final piece is their dividend decision in Section F.5.
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  They decided not to declare a dividend for FY 2025.
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  No payout to shareholders, why not? The stated reason is quite direct.
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  In view of the funding needs of the group for future business development and expansion.
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  So they're holding on to that cash, that S2.41 million dollars they ended the year with.
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  They're earmarking it for whatever comes next. Precisely.
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  It ties everything together. The cautious outlook, the expectation of lower
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  revenue, the need to fund future opportunities carefully.
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  They're preserving capital. Okay, let's try and wrap this up then.
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  Our deep dive into Rich Capital Holdings FY 2025 results shows a year dominated
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  by that huge drop in revenue and profit, which the company says was because
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  major construction projects finished up. Right.
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  They did cut some admin costs and the net loss narrowed slightly,
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  but they were still unprofitable and, importantly, burned through a fair bit
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  of cash from operations.
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  Yeah, and the balance sheet shrank accordingly.
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  Now, looking ahead, it's all about caution.
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  Despite seeing some optimism in the market, their own approach is cautious,
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  leading them to forecast lower revenue again for FY2026.
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  And they've acted on that caution, shedding a subsidiary, holding on to cash
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  by skipping the dividend, all stated as being needed for future development,
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  even if that development means less top-line activity for now.
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  It really sounds like they're deliberately pausing, being very selective about
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  new work because of the environment, even if that means getting smaller in the
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  short term while they wait for the right kind of opportunities.
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  It suggests a period of careful evaluation, maybe waiting for better market
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  terms or project profiles before committing significant resources again.
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  Prioritizing stability and careful selection over just chasing growth right now.
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  Which leads us to a final thought for you, our listener, to chew on.
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  Rich Capital Holdings sees a cautiously optimistic market, but adopts a cautious
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  approach leading to lower expected revenue.
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  What specific kinds of projects or market shifts might justify this strategy?
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  Why would a company choose to potentially shrink, burn operational cash,
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  and conserve funds essentially waiting on the sidelines, rather than aggressively
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  pursuing the opportunities that are out there, even in a tough environment?
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  What are the potential upsides and downsides of playing this waiting game?
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  Music.