I guess this was long overdue, but a review and analysis of Boustead should not be done in a hurry anyway. The company is slowly and steadily growing its business and its order book, and the CEO has expressed optimism recently that a turnaround can be expected in the water and wastewater division. I will be analysing the P&L, Balance Sheet, Cash Flow Statement as well as commenting on Boustead’s 3 main divisions (not counting ESRI which does geo-spatial – I will touch briefly on this) for Part 1. Part 2 will analyze and comment on the segmental business units for Boustead and their performance and prospects. Part 3 will touch on the future – how Boustead has progressed thus far in FY 2009, the direction each division is taking, as well as future endeavours that the company is planning to make (from FF Wong’s interview in Pulses magazine as well as his audiocast replies).
Profit and Loss Review
If one takes a close look at the Income Statement, revenues for FY 2008 had increased 27.5% compared to FY 2007, while COGS had increased by 33.5%. As a result, gross margin dropped from 34.1% in FY 2007 to 31.0% in FY 2008. Read more…