Annual Report 2006 - Venture Corporation Limited

2006 was one of the best years in profit generation in the Group’s history. The key
initiatives that we have put in place earlier are yielding results.
The Group registered stronger operating margins over four linear quarters in 2006
and recorded the most significant margin improvement in the fourth quarter. The
profitability improvement is underpinned by sustained operational excellence and
better returns from our cash and non-cash investments.
Whilst the operating environment within the electronics industry remained
competitive in 2006, we nevertheless managed to rise above and beyond our
challenges to emerge stronger and fitter.
Notwithstanding the deterioration of the USD against the SGD, the Group reported
a 19% increase in net profit attributable to shareholders of $239m or EPS of 88.1
cents compared with a net profit of $201m or EPS of 74.5 cents a year ago. This
was achieved despite an increase in provision for corporate tax. Annual revenue is
$3.1b, a slight decline from $3.2b achieved in 2005. However, in USD terms, the
Group reported a slight increase in revenue.
The acquisition of GES International Limited (GES) was completed on 29 November
2006. GES contributed one month to the Group’s revenue and profit for the month
of December 2006. However GES’ contribution in 2006 was offset by one month
amortisation of its intangible assets, plus a non-recurring charge for the realisation
of re-valued GES finished goods inventory and a deferred tax liability write-back in
accordance with FRS 103 - Business Combinations.
Our achievements in 2006 were topped with the Group being awarded the “Best
Domestic M&A Deal 2006” and “Best Singapore Deal 2006” by FinanceAsia for its
acquisition of GES International Limited.
Dividend
The Board is pleased to propose a final dividend of 25 Singapore cents per share
and a bonus dividend of 25 Singapore cents per share on a tax exempt basis for the
financial year ended 2006.
Operation Review
The overall performance of our various business units is in line with our
expectations.
Our four clusters of excellence in South-east Asia, North Asia, Europe and the USA
continue to deliver results. This has enabled us to offer the best time to market/cost
proposition to best suit our customers’ needs.
As planned, we have forged enduring relationships with many of our customers.
We remain committed to enhancing our customer relationships and strengthening
customer care through sustained operational excellence using TQRDCE (technology,
quality, responsiveness, delivery, cost and environment) metrics.
annual report 2006
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