Message from the Chairman of Octopus (APAC) Holdings Limited, reproduced from the FY2024 Annual Report.
Dear Shareholders,
On behalf of the Board of Directors of GS Holdings Limited (“GS Holdings” or the “Company” and together with its subsidiaries, the “Group”) and the Acting Chief Executive Officer (“Acting CEO”), it is my pleasure to present to you GS Holdings’ Annual Report for the financial year ended 31 December 2024 (“FY2024”).
During FY2024, the Group undertook several key exercises to: (a) grow its capital base; (b) renew its leadership; (c) optimise its business portfolio; and (d) widen its opportunities for future growth.
The Company conducted three rounds of fund raising to raise net proceeds of approximately S$9.88 million via the issue of new ordinary shares in FY2024. As a result, the Group reported consolidated net assets of S$5.42 million and net current assets of S$5.19 million as at 31 December 2024, thus ending FY2024 with net cash of S$3.40 million, comprising cash and cash equivalents of S$5.75 million and loans and borrowings, including lease liabilities, of S$2.35 million. With these balance sheet improvements, this has significantly improved the Group’s ability to continue as a going concern.
During FY2024, we also oversaw the smooth renewal of our leadership team, with the appointment of Mr. Loo Hee Guan as Executive Director (“ED”) on 1 March 2024 and as Acting CEO from 21 December 2024, in replacement of Mr. Pang Pok who stepped down as ED on 1 June 2024 and retired from the CEO position on 21 December 2024. As ED and subsequently as Acting CEO, Mr Loo is responsible for the overall management of the Group, including operational oversight, strategic direction for growth initiatives, and business strategy development. Additionally, he oversees corporate affairs, business rationalisation and development, investor relations, as well as compliance and corporate governance.
To streamline our corporate structure and to free up managerial resources, we announced in November 2024 that the Company is in the process of striking off direct and indirect dormant subsidiaries incorporated in Singapore or the People’s Republic of China. These subsidiaries either had not commenced business since their incorporation or had ceased operations in previous years. The strike off of these subsidiaries did not have any material impact on the earnings per share and net tangible assets of the Group for FY2024.
BOP Business. The holding company of the BOP business, Wish Hospitality Holdings Private Limited (“WHH”), was also placed under creditors’ voluntary liquidation on 30 December 2024. WHH had not been able to secure any new BOP business and has not undertaken any other revenue-generating business since the termination of prior BOP service agreements in 2021. With the voluntary liquidation of WHH and the appointment of a liquidator, WHH was reclassified under discontinued operations and its assets and liabilities held under liquidation were deconsolidated for FY2024. Consequently, WHH’s net liabilities of S$3.45 million were derecognised and a one-time loss of S$0.80 million was recognised in the loss from discontinued operations for FY2024.
As announced by the Company on 17 October 2023, the sum of RMB22,000,000 held in the bank account of Wish Health Management (Shanghai) Co. Ltd., a subsidiary of WHH, has been retained by the authorities in the People’s Republic of China (“PRC”). The Company is presently seeking legal advice from lawyers in the PRC on the steps to be taken in respect of the aforesaid monies in light of the voluntary liquidation of WHH.
F&B Business. During the year, we streamlined and optimised the number of F&B establishments to maximise profitability. As at 31 December 2024, we continue to operate a total of 7 F&B establishments, including 2 food courts/coffee shops under the “Hao Kou Wei” brand name, 1 chicken rice restaurant, 3 chicken rice stalls in food courts under the “Sing Swee Kee” brand name, and 1 cafe under the brand name “Raffles Coffee”. The full-year revenue rose marginally, from S$9.23 million in FY2023 to S$9.24 million in FY2024, while segment profit for the F&B business rose from S$0.15 million to S$0.39 million in FY2024 despite an impairment charge on property, plant and equipment of S$0.11 million in FY2024.
Including investment holdings performance, net loss from continuing operations widened by S$0.30 million, from S$1.27 million in FY2023 to S$1.57 million in FY2024, mainly due to the increase in depreciation of right-of-use assets and property, plant and equipment and the impairment of plant, property and equipment of an aggregate amount of S$0.37 million in FY2024. Further details are discussed in the Operations and Financial Review section of the annual report.
As part of the Group’s corporate strategy to diversify and expand into complementary business areas within the food and beverage industry, we entered into an agreement (“Agreement”) on 23 October 2024 to acquire Octopus Distribution Networks Pte. Ltd. (“ODN”) from Octopus Global Hldgs Pte. Ltd. (“Vendor”) for an aggregate consideration of S$11.8 million (“Proposed Acquisition”).
ODN is a leading integrated beverage solutions group in Singapore, providing brand management, import & export, distribution, logistics and warehousing services for alcoholic and non-alcoholic beverages and liquor in Singapore. Through this acquisition, the Company will be able to acquire a new operating business that is synergistic to the Group’s business model, and provide the Group with immediate access to a new customer base and operating scale within the beverage sector in Singapore’s F&B industry, allowing the Group to diversify and increase its revenue streams and improve profitability.
The Proposed Acquisition has been approved by shareholders at the extraordinary general meeting on 13 December 2024. Of the consideration of S$11.8 million, S$2 million has been paid in the form of a refundable deposit at the execution of the Agreement, S$6.3 million will be satisfied via the allotment and issue of 166,226,912 new ordinary shares at the issue price of S$0.0379 per share, and S$3.50 million will be paid in cash to the Vendor at the completion of the Proposed Transaction.
According to the Singapore Department of Statistics, sales of food & beverage services rose by 2.8% to approximately S$11.9 billion in 2024. Among restaurants, fast food outlets, food caterers, and cafes, food courts & other eating places, food caterers saw the highest growth of 19.6%. The market segments that we operate in — namely restaurants, cafes, food courts & other eating places — grew by 0.5% and 2.8% respectively. We envisage that the Proposed Acquisition will allow the Group to serve the larger F&B industry as a whole and thus increase the Group’s market penetration and expand into new market segments.
The Board has not recommended a dividend for FY2024 as conservation of funds for the Group’s business activities and working capital requirements remains crucial in the Group’s GROW journey.
On behalf of the Board, I extend my sincere gratitude to our dedicated management team and employees, our valued customers and business partners, and especially our shareholders for their unwavering faith in GS Holdings. In particular, we thank our shareholders for their loyal support of our oversubscribed rights issue that was completed in October 2024, where we received valid acceptances and excess applications for 131% of available rights shares.
We look forward to building on the momentum achieved in the past year and delivering continued growth in the years to come.
Lim Kee Way Irwin
Independent and Non-Executive Chairman
Reproduced from the Chairman’s Message in the GS Holdings Limited FY2024 Annual Report. This is the most recent published Chairman’s statement; the FY2025 statement will be issued with the next Annual Report.