Dear Shareholders,
GROUP PERFORMANCE
It has been a challenging 12 months and our bottom
line has been dented by the general business
slowdown, depreciation of the AUD and NZD, and
a hefty fair value write-down of our investment
property in Perth.
The Group reported net profit of S$22.4 million for
the financial year ended 31 March 2016, representing
a 25% decrease from the previous year.
Specifically, there were (i) a 10% weaker translation
of the Australian and New Zealand currencies
compared to the previous year, (ii) a S$23.4 million
write-down in the fair value for Dynon’s Plaza, despite
four years remaining of the tenancy on the property,
and (iii) a 56% decline in property development sales
accounted for during the financial year just ended.
Had there been no write-down, our bottom line
would have been significantly better than the previous
year. In terms of hotel owning/management, the
operating profit for the year just ended is consistent
with the previous financial year after allowing for
foreign exchange translation differences and the loss
of contribution from the closure of Stamford Grand
North Ryde.
Given the foregoing reasons, I seek shareholders’
understanding for the Board’s recommendation to
reduce dividend for the financial year under review to
0.5 cents. On amore optimistic note, I amconfident the
subsequent years will deliver a better financial outcome.
OPPORTUNITIES
As the construction of our Macquarie Park Village
(MPV) progresses, the opportunity of building
an additional 60 units has arisen. As this will
add considerable value, we are now lodging
our supplementary development application.
Concurrently, a significant part of MPV is expected
to be completed during 1H2017. The entire project is
slated for completion in 2018.
Currently, we are also processing development
applications for two important sites, one of which
requires the purchase of its freehold title. When
crystallised, both will be noteworthy projects. As
foreshadowed inmy previous Annual Report, a second
Argentinian grill, La Boca Sydney, successfully made
its debut in the NSW market. Works have also started
on 26 new suites at Stamford Plaza Melbourne. These
initiatives will increase both revenue and enhance our
existing assets’ value.
In the last Annual Report, I reported that some 142 units
at MPV were under review as development application
for a portion of the carpark was not granted. I am
pleased to update that only 22 of these units are
unsold and marketing efforts continue for these units.
Looking ahead, management expects the hotels
to continue to perform profitably despite looming
oversupply in certain cities. To support a longer-term
strategic growth plan, we are also in the process
of recruiting resources for property development
(focusing on different geographies) as well as for
hotel management in the different market segments.
We hope to share more details in the near future.
APPRECIATION
As part of our Board renewal, I am pleased to welcome
Dr Stanley Lai, a Senior Counsel aboard. At the same
time, I thank Mrs Lim Hwee Hua for her invaluable
counsel to the Board. I would also like to take this
opportunity to thank all colleagues in Australia, New
Zealand and Singapore for their hard work to keep
the Stamford brand flying high. Last but not least, my
thanks to my fellow Board members for their wise
counsel and to shareholders for keeping faith with us.
C. K. Ow
Executive Chairman
CHAIRMAN’S MESSAGE
3
ANNUAL REPORT 2015/2016
