Annual Financial Report to Shareholders
Sydney, Oct 30, 2015 AEST (ABN Newswire) - The Directors of Story-I Ltd (
ASX:SRY) present their financial report on the Company and its controlled entities PT Inetindo Infocom and Story-I Pte Ltd (the "Group") for the year ended 30 June 2015.
OPERATING AND FINANCIAL REVIEW
Principal Activities
The principal activities of the Group, through its Indonesian operating subsidiary, is as an Apple Authorised Reseller and IT life style product retailer with 16 stores in 10 cities throughout Indonesia.
Operating Results
The operating profit after income tax of the Group for the year ended 30 June 2015 was $1,244,633 (2014: profit of $1,052,768).
Review of Operations
PT Inetindo Infocom was listed on the ASX in January 2015 via a reverse takeover of Pine Capital Ltd. In July 2015, Pine Capital Ltd changed its name to Story-I Ltd.
Although primarily an Indonesian based business, the Company listed on the ASX to provide improved visibility with a high standard of corporate governance as it deals with well-known international brands like Apple, Samsung, Lenovo and Citrix. The ASX listing also serves as a platform for the Group to grow organically in Indonesia and across the South-East Asian region.
Inetindo, the Indonesian operating entity, currently has 4 divisions:
1) Retail Division. Story-I's retail network encompasses the Authorised Apple Resellers under the Story-I branded stores and the Iconnect retail outlets carrying its other brands such as Samsung, Lenovo, and Huawei, as well as a range of accessories. A third retail brand within the group is the Geek Zone. In addition to being an Apple Authorised Service Provider, Geek Zone also sells apps and a wide range of accessories.
2) Distribution division. Inetindo is the exclusive distributor for Lenovo computers, notebooks and mobile phone products for Kalimantan in Indonesia. Lenovo is one of the world's largest manufacturers of computers, notebooks and mobile phones with operations in 60 countries and selling products in 160 countries. Inetindo will build on this relationship throughout Indonesia in 2016 and will continue to expand further in the ASEAN region.
3) E-commerce Division. In addition to the 3 bricks and mortar retail brands, being Story-I, Iconnect and Geek Zone, Inetindo has a full online E-commerce platform that both retails devices and accessories and hosts an online community of users and buyers. Story-I sees continuing growth in the online commerce platform given the increasing online purchasing activity currently witnessed in our fastest growing customer demographic, those between 16 and 30 years old.
4) Enterprise Solutions & Education Division. Inetindo, commencing with its recently signed reseller agreement with Citrix, will bundle its Apple devices with Citrix enterprise software solutions to enable business mobility through mobile access to data and cloud based application software and communications on any device over any network. The enterprise software division will open the infrastructure as a service market to Indonesian corporates and Multi-National Companies entering Indonesia. Inetindo will generate new revenue in addition to device sales in the form of Enterprise Software sales and recurring software service and upgrade contracts.
Indonesia - Asia's next Big Opportunity
Strong Regional Demographics
- Indonesia is the fourth most populous country in the world with a population of 253 million, which is expected to grow to 265 million by 2020. Vietnam has a 92 million population, whilst ASEAN as a whole has approximately a 600 million population.
- MAC (middle class and affluent consumers) population in Indonesia is expected to double to 141 million by 2020.
- Strong GDP growth in the region over the last 5 years.
Story-I now has the platform with store and online presence across its four divisions throughout Indonesia to truly capitalise on the country's substantial and well documented consumer growth. The opportunity is to rapidly grow store numbers with domestic and regional expansion, while at the same time drive customer penetration with its expanding online E-commerce offering.
Growth Drivers
- Additional stores to be opened in 2015/16. The company expects to open 7 more stores in Indonesia and Vietnam in 2015/16.
- Launch of new Apple and other brand products is expected to fuel an increase in revenue. The company expects strong sales from the new products including the iPhone 6S and 6S Plus, the MacBook Air and the Apple iWatch.
- Strong demand for high margin accessories for newly launched products. The company expects to enhance its net margins through a higher percentage of revenue coming from the high margin accessories, as well as wearables, which is expected to be well received.
- Overseas expansion. The company will set up operations in Vietnam to capitalize on the economic growth in that country. The first store opened in Ho Chi Minh City in September 2015, and this will be a base for further expansion throughout Vietnam.
- Enterprise Solutions. In addition to supplying iPhones and iPads to MNCs and domestic corporations, Inetindo is also providing bundled business solutions with service and maintenance contracts which provide high margin initial sales with ongoing recurring revenue. Story-I is an Apple Enterprise and Apple Education partner allowing further bundling of Apple devices and software in the lucrative Business to Business space.
- Online E-commerce platform. The iConnect online E-commerce platform represents a strong area of growth with its unique ability to penetrate Indonesia's vast consumer population. iConnect will deepen its product offerings with promotional campaigns and loyalty programs in addition to joint promotions with Tokopedia.com and bukalapak.com, two of Indonesia's top three online networks.
- M&A opportunities. Apple has approached the company as its main Reseller, and is still expanding, to be the consolidator of the fragmented Apple legacy stores in Indonesia. Apple has also introduced opportunities in Vietnam and Myanmar which the company is currently reviewing.
The financial information and statements contained within this annual financial report focus on the continuation of PT Inetindo Infocom ("Inetindo"), which is treated as the acquirer for accounting purposes of Story-I Pte Ltd, effective on and from 24 December 2013, and Story-I Ltd (previously Pine Capital Ltd) effective on and from 16 January 2015. The Inetindo business is considered the 'ongoing business' following the acquisition, and the significant changes to the respective entity's previous accounting arrangements, and their effect on the financial position of the integrated entity, are set out in more detail in this annual financial report. Therefore, the comparative figures will not reconcile to previous annual financial reports prepared by Story-I Ltd.
Financial Position
The net assets of the Group were $4,880,512 as at 30 June 2015 ($3,421,656 as at 30 June 2014).
Significant Changes in the State of Affairs
The Group raised $648,000 (before broker commissions) in capital during the financial year via the issuance of 3,240,000 fully paid ordinary shares pursuant to the listing on the ASX. There were no other significant changes in the state of affairs of the Group during the financial year.
Dividends Paid or Recommended
The directors do not recommend the payment of a dividend and no dividends have been paid or declared since the start of the financial year.
Significant Events After Reporting Date
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly affect the operations of the Group or the state of affairs of the Group in future financial years.
Likely Developments and Expected Results
The Group expects to maintain the present status and level of operation and hence there are no likely unwarranted developments in the entity's operations.
Environmental Issues
The Group ensures the appropriate standard of environmental care is achieved and, in doing so, that it is aware of and is in compliance with all environmental legislation. The directors of the Company are not aware of any breach of environmental legislation for the year.
Proceedings on Behalf of the Group
No person has applied for leave of the Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.
Indemnification of Officers and Insurance Premiums
The consolidated entity has not paid any premiums in respect of Directors' and Officers' insurance during the year (2014: $nil).
Options
At the date of this report, there were no unissued ordinary shares of Story-I Limited under option.
To view the full report, please visit:
http://media.abnnewswire.net/media/en/docs/ASX-SRY-888789.pdf
About Story-I Ltd
Story-i Ltd (ASX:SRY); Singapore incorporated Story-I Pte Ltd operates 14 Apple and related stores in Indonesia through its 95% owned subsidiary PT Inetindo Infocom. The Indonesian operations are structured with Story-i branded stores retailing Apple products and accessories, iConnect retailing Samsung and Lenovo phones, computers and lifestyle accessories, and GeekZone providing software, equipment servicing and apps.
Story-i is an Apple Authorised Reseller and GeekZone is an Apple Authorised Service Provider, both located in Indonesia. Story-i is leveraged to the strongly growing affluent consumer population in Indonesia. This demographic shift and the well documented propensity towards mobile phones, personal computers and associated lifestyle accessories underpins the strong demand for Story-i's products. Story-i is following an aggressive growth strategy by organically growing store locations strongly while at the same time greatly extending its consumer reach with its recently launched online and application strategy.
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