SINGAPORE - Allied Technologies expects to swing into an audited net loss for 2018 due to impairment losses despite initially posting an unaudited full-year profit in March, the Catalist-listed precision engineering company announced late Monday (April 15).
Because its auditor requires additional time, the company is also seeking an extension of time from the Singapore Exchange to hold its annual general meeting and to announce its results for the first quarter of 2019.
Allied Tech said that it is now expecting a full-year net loss for 2018 mainly attributable to impairment losses stemming from two recent e-commerce acquisitions. On March 1, the company posted an unaudited net profit of $1.9 million for full-year 2018, a 46 per cent year-on-year decline.
The company, which sold its metal stamping business in 2017, had acquired a 51 per cent stake in Asia Box Office, which provides ticketing solutions for events, for $30 million on April 4; and another 51 per cent stake in Activpass Holdings, which provides software as a service solutions for businesses, for $25.2 million on April 3. Allied Tech needs shareholders' approval to ratify those transactions. In its unaudited full-year results on March 1, Allied Tech had reported a $0.61 million full-year profit before tax for Asia Box Office, and a $0.24 million full-year loss before tax for ActivPass.
On Monday evening, the company said that its auditor, Ernst & Young, has indicated that it will require more time to complete the group's audit for FY2018, as it is still reviewing management's responses and awaiting the provision of certain documents by the group. The auditor also expects that it may have to seek further clarification from the company following its review.
Allied Tech said that it is using "all best efforts to work with the auditors", and is following up with all outstanding information and documents.
The delay is exacerbated by the fact that Allied Tech's chief executive was only appointed on March 1 and its chief financial officer only took office on Feb 1, the company said.
In January this year, Allied Tech's CFO, Andrew Wong, left the company barely two months into his new job after raising concerns over expenses classification, documentation processes, and an audit of Asia Box Office - an e-commerce ticketing platform that Allied Tech invested in last year. The resignation of Mr Wong was the fourth major departure at Allied Tech in 12 months. He had taken on the role only last November, and has since been replaced by former Centurion Corp associate director of investment, Daisy Ong.
The counter fell 8.3 per cent, or 0.1 cent, to trade at 1.1 cent as at 9.24am on Tuesday.