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performance
Annual Report 2017
27
The Division’s cash flow from operations remains strong at
RM158.3 million in FYE2016/17, an increase of RM105.5 million
from the previous year thereby providing us with the financial
flexibility to seize any new market opportunities as and when they
arise.
During the year, trade receivables increased by 64.1% to RM49.8
million. A significant amount of the trade receivables arise
from customers with whom the Division has had a long-term
relationship, and therefore the Board is of the view that the risk
of non-payment is low and the receivables are collectable. During
the financial year, the Division spent RM1.8 million on capital
expenditure (“CAPEX”) compared to RM7.2 million in the last
financial year, a decrease of 75.0%. CAPEX during FYE2016/17
is mostly restricted to assets needed to meet or maintain the
Division’s operational requirements.
OUTLOOK
During the year under review, the testing economic climate
and heightened strategic moves by competitors had exerted
pressures within the Division’s traditional and niche market
segments. The Division has also experienced rapidly evolving
customer expectations, innovative digital technologies and new
service models, which are changing end-to-end processes.
The Division expects that challenges in our existing markets will
remain and the expiry of the aforesaid supply contract will have
an impact on the Division’s performance in this current year. On
the same token, the past year’s results and events reflect the
attractive nature of the markets in which we operate, but it also
indicates that we need to take a long hard look at our portfolio.
The overall market opportunity is reflected by the strong demand
for technology-driven ID and security solutions both locally and
overseas thus creating significant potential for the Division.
To seize these opportunities, the Division is now focused on
adapting our businesses to ensure that we keep pace with the
dynamic and accelerating market trends, and offset the decline in
our traditional security printing segment.
For the next few years, we have identified the following as top
priorities, namely:
• adapting the Division to being a multi-platform entity;
• transforming our business model while simultaneously
building the capabilities needed for the future, and
• expanding our presence into adjacent geographies in
particular product segments with our strategic partners.
MANAGEMENT DISCUSSION AND ANALYSIS