CFM Holdings Limited: Material Variance Announcement and Financial Highlights FY2024

Report Date and Financial Year:

• Report Date: 1 October 2024
• Financial Year: Reporting for FY2024

Key Facts in the Report:

1. Material Variances Identified:

   • The report highlights discrepancies between the unaudited financial results (announced on 27 August 2024) and the audited financial statements for FY2024.
   • A significant variance in the company’s financials includes a reversal of an impairment loss on investment in two subsidiaries, leading to changes in both the company-level and group-level financial statements.

2. Changes in Financial Position:

   • Company Level: The investment in subsidiaries was adjusted to $17.283 million (audited) from $15.853 million (unaudited), resulting in an increase of 9.02%.
   • Group Level: Adjustments were made to current assets and liabilities, including:
     • Other receivables and prepayments increased by $16,000 (7.31%).
     • Income tax recoverable was added at $142,000 (100% increase).
     • Income tax payable increased by $143,000 (46.58%).

3. Cash Flow Variances:

   • Adjustments to cash flow statements include:
     • Inventory write-downs and write-backs were adjusted, affecting the cost of goods sold.
     • Receivables were revised, resulting in an 83.67% increase.
     • Purchases of property, plant, and equipment were adjusted, leading to a 39.58% increase.

4. Loss After Tax Adjustment:

   • The company’s loss after tax decreased to $2.17 million (audited) from the previously announced $3.60 million (unaudited).

5. Explanatory Notes for Variances:

   • Adjustments resulted mainly from a reversal of impairment losses, reclassifications, and corrections of intercompany transactions that were incorrectly stated in the unaudited results.

Investor Actions:

1. For Current Investors:

   • Caution: Given the material variances and financial adjustments, current investors should exercise caution when dealing with the company’s shares.
   • Monitor Further Announcements: The audited financial statements will be set out in the Annual Report FY2024, which will be released in due course. Investors should review this report for more comprehensive insights.

2. For Potential Investors (Not Currently Holding the Stock):

   • Exercise Prudence: Due to the discrepancies and changes in the financials, potential investors are advised to conduct further analysis and seek independent professional advice before considering an investment in the company.

Special Notes for Investors:

• No specific mention of dividends is included in the report.
• Shareholders are explicitly advised to read the upcoming Annual Report FY2024 for a more complete understanding of the company’s financial position.
• Investors are advised to seek independent advice from professional advisors before making any trading or investment decisions concerning the company’s securities.

Special Activities or Actions for Profitability Improvement:

• The report does not explicitly mention any new special activities or actions undertaken by the company to improve profitability beyond the stated financial adjustments.

Recommendation Summary:

• Current Investors: Exercise caution and stay updated on upcoming financial releases (e.g., the audited annual report) for a clearer picture of the company’s financial health.
• Potential Investors: It is advisable to wait for the release of the full audited financial statements in the Annual Report FY2024 and seek independent advice before making any investment decision.

Disclaimer:

The above recommendations are based solely on the content provided in the attached report. This does not constitute financial advice. Investors should perform their own due diligence and consult a financial advisor before making any investment decisions.