Financials

Third Quarter Financial Statement And Dividend Announcement For The Period Ended 31 January 2010

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Profit & Loss

Comprehensive Income

Review of Performance

Turnover of the Group improved significantly by 18.4% to $413.8million for the period ended 31st January 2010 ("3QFY2010") from $349.5million in the corresponding period ended 31st January 2009 ("3QFY2009"). Net profit before tax ("PBT") lifted by 50.2% to $28.9million for 3QFY2010 compared to $19.3million for 3QFY2009. PBT for the quarter ended 31st January 2010 improved significantly by 44.4% to $10.0million from $6.9million for the corresponding period in the preceding financial year.

The biggest contributor to the improved Group result is the property development division which had successfully sold all the units of its maiden "One Robin" project. The improved headline performance in the retail operations and effective cost control were also key reasons for the improvement.

Gross profit for 3QFY2010 rose 16.1% to $68.7million resulting mainly from the improved Group turnover.

Other operating income increased mainly due to income received from Government's Job Credit Scheme implemented in FY2009.

Distribution and selling expenses increased primarily because of marketing expenses related to property development.

Other operating expenses reduced from $1.3million to $0.04million mainly due to gain from disposal of other investment, and property, plant and equipment. In addition, certain subsidiaries recorded net exchange gain compared to net exchange loss in the same period last year.

A total of 10 new stores were added during the 9 months ended 31st January 2010 in Singapore, Malaysia and Hong Kong. New stores and organic growth of existing stores contributed to the 8.2% increase in turnover of Retail and Distribution division, from $296.2million in 3QFY2009 to $320.4million in 3QFY2010. PBT rose 64.4% to $10.2million from $6.2million, in line with the higher turnover. Included in PBT is a provision made by Harris Book Company Pte. Ltd. upon reaching an amicable settlement with HSBC Institutional Trust Services (Singapore) Limited, the trustee of Suntec Real Estate Investment Trust in respect of the claim as disclosed in the Announcement dated 23 December 2009.

The Group had a total of 132 retail outlets in Singapore, Malaysia and Hong Kong as at 31st January 2010. Details are as follows:

Turnover for publishing and e-learning division declined marginally by 2.6% from $53.3million in 3QFY2009 to $51.9million in 3QFY2010.

PBT fell from $13.7million to $11.3million mainly due to decrease in turnover and absence of income from associate during the period.

The Group's E-learning division in Singapore will be introducing a new suite of comprehensive web-based Learning Management System and courseware in the primary school segment to cater to the increased demand for e-learning in schools.

The Property Development Division recognized sales revenue of $41.4million from the Group's maiden project "One Robin" in 3QFY2010. PBT of the division was $7.5million.

This segment contributed 10.0% of the total Group turnover and 24.7% of the total Group PBT for 3QFY2010.

Construction for the Group's second project, 18 Shelford, is progressing as scheduled while the third project, 8 Raja, is currently in its planning phase.

Total borrowings reduced from $67.5million as at 30 April 2009 to $29.8million as at 31 January 2010, resulting in significant improvement in the Group's gearing ratio from 0.50 to 0.19.

Trade creditors and inventory balances increased mainly due to the expansion of the retail business and in anticipation of the year-end-holiday and back-to-school seasons.

Cash and cash equivalents increased to $76.7million as at 31 January 2010 compared to $71.1million as at 30 April 2009; contributed by improved performance in the retail division.

Trade receivables increased from $12.6million as at 30 April 2009 to $30million as at 31 January 2010: attributable to the cyclical fluctuations of the publishing business and progress payments receivable from the sale of "One Robin".

The Group generated $49.3million from operations for the 9 months ended 31 January 2010. The cash generated was mainly used for capital expenditure and repayment of term loans.

Commentary

Although the world economy is gradually recovering, the Group believes that there will still be many challenges and uncertainties ahead. Hence, the Group will maintain its heightened and the disciplined approach to risk management and operational efficiency. With the Group's strong cash position and healthy balance sheet, it is confident that it will be able to weather the uncertainties and continue to grow its market share.

Balance Sheet