Dear Shareholder:
On behalf of the Board of Directors, I am pleased to present the Annual Report of Captii Limited for the financial year ended 31 December 2024.
Navigating Challenges, Strengthening Foundations
Despite our concerted efforts, we were unable to return the Group to profitability in 2024. However, we remain committed to driving sustainable improvements across our business segments.
During the year, our Unifiedcomms businesses continued to face revenue challenges, though this was not the primary factor behind our financial outcome. The reassessment of projected cash flows from certain managed service contracts within Unifiedcomms had a material impact on expected earnings. Additionally, broader market conditions led to a significant devaluation of our venture investment portfolio. Collectively, these non-cash impairment and fair-value losses totalled approximately S$8.7 million, making them the key contributors to our net loss for the third consecutive year.
Revenue Trends and Margin Expansion
While our group revenue declined from S$18.3 million in 2023 to S$17.6 million in 2024, we achieved an improvement in gross profit margins, increasing from 46.6% to 53.4%. This was primarily driven by a more favourable sales mix, improved margins in GlobeOSS, and cost efficiencies in managed service contracts within Unifiedcomms.
Unifiedcomms recorded revenue of S$10.2 million, reflecting a 12.7% year-on-year decline, while GlobeOSS saw an 11.9% revenue increase to S$7.3 million. Our loss before tax narrowed to S$8.5 million, a 24.9% improvement from the $11.3 million recorded in 2023. Excluding the non-cash impairment and fair- value losses, the Group achieved a modest profit before tax of S$0.2 million.
Our group revenue was generated from system sales contracts and recurring managed service contracts. In 2024, system sales contracts contributed S$6.3 million, reflecting a year-on-year increase of 23.4%. However, revenue from managed service contracts declined by S$1.9 million to S$11.3 million. Moving forward, we remain committed to strengthening our managed service business to enhance long-term revenue sustainability and drive consistent growth.
Negative Bottom-Line: Impact on ROE
As a result of the year’s negative financial outcome, our group recorded a return on equity (ROE) of -20.9% in 2024, compared to -20.4% in 2023. However, when excluding the impact of non-cash exceptional losses - primarily related to venture investments and asset impairments - our adjusted ROE stood at -0.9% in 2024, compared to 1.7% in the prior year. This underscores the material effect of these accounting adjustments on our bottom-line results.
Financial Position and Strategic Investments
As of end-2024, we maintained a strong balance sheet with cash and cash equivalents of S$10 million. Our disciplined financial management allows us to continue investing in growth initiatives. Throughout the year, we actively evaluated investments opportunities but did not execute any new acquisitions, keeping our ventures investment portfolio stable at five investees. We remain committed to identifying strategic investments that align with our long-term vision.
Strengthening Our Business for the Future
While 2024 was a challenging year, we took significant steps toward strengthening our business fundamentals. We continued reinvesting in Unifiedcomms and GlobeOSS to drive product innovation and market segment diversification. Additionally, we enhanced operational efficiencies to improve service delivery and cost structure.
Given our focus on capital preservation and future growth, the Board has decided not to recommend a dividend for the financial year ended 31 December 2024.
Looking Ahead
As we move into 2025, we remain focused on improving financial performance, strengthening our market position, and creating long-term value for our shareholders. We will continue to explore opportunities for sustainable growth while maintaining fiscal discipline.
I extend my sincere appreciation to our employees for their resilience and commitment, our shareholders for their trust and patience, and the regulatory bodies and government agencies for their support. Your continued belief in our vision drives us forward.
Last but not least, on behalf of the board, I would like to take this opportunity to express our appreciation to Peng Hock and Paul for their invaluable contributions to both the board and the group, and extend our warm welcome to Kam Fei and Yee Kou to the board.
Wong Tze Leng
Executive Chairman