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Kitchen Culture posts half-year net loss of S$1.69m
KITCHEN Culture Holdings' half-year net loss widened to S$1.69 million from its year-ago deficit of S$1.26 million as sales fell in its residential and distribution and retail segments.
Loss per share for the six months ended Dec 31, 2017 was 1.7 Singapore cents, wider than the year-ago loss per share of 1.3 Singapore cents. Shares in Kitchen Culture, a supplier of high-end kitchen systems, last traded at 17 Singapore cents apiece on Nov 21.
For the six months ended Dec 31, the group's revenue fell 61.5 per cent to S$7.8 million from S$20.2 million in the previous year. Residential projects revenue dropped by 71.2 per cent, or S$10.4 million, to S$4.2 million, while sales from the distribution and retail segment declined 35.7 per cent, or S$2 million, to S$3.6 million.
Kitchen Culture described the business outlook for the next 12 months as "challenging and competitive" amid uncertainty in the global economy. But it noted that it recently secured two contracts in Singapore amounting to approximately S$6.1 million that will be fulfilled over the next one to three years.
Looking ahead, there are plans to broaden the group's business by entering the mass market sector through a relaunch of the group's Pureform brand for kitchen and wardrobe systems, and any interior fit-out solutions. Kitchen Culture also plans to expand the group's businesses through Kroom, which retails premium kitchen appliances and wardrobe systems.
In a separate filing on Thursday, the company also announced that executive chairman and controlling shareholder Lim Wee Li has agreed to convert S$2.5 million of debt owed to him by the company into 18.5 million new shares at a conversion price of 13.53 Singapore cents per share. Mr Lim is owed a total of S$4.21 million by Kitchen Culture.
The conversion price represents a 10 per cent discount to the volume weighted average price of S$0.1503 for trades done on Nov 21, being the last full market day on which the group's shares were traded.
Following the proposed debt conversion, Mr Lim's shareholding in the company will be increased from 74.7 per cent to 78.6 per cent. The new shares represent 15.6 per cent of the firm's enlarged share capital.
Based on Kitchen Culture's unaudited financial statements for the half year ended Dec 31, the group was in a negative working capital position of S$3.5 million and a net liability position of S$1.4 million.
Thus, the proposed debt conversion will enable the group to improve its working capital and net tangible assets value; reduce its gearing and loss per share; eliminate the need for any cash repayment; and allow the group to focus its resources on stabilising its business activities, Kitchen Culture said.
Among other things, completion of the proposed debt conversion is subjected to the listing and quotation notice being obtained from SGX-ST (Securities Trading), and the approval from shareholders at an extraordinary general meeting to be convened.