PRG Holdings Berhad Annual Report 2019

ANNUAL REPORT 2019 17 2. Property Development & Healthcare Divisions The Property Development Division recorded a total revenue of RM6.1 million and loss before tax of RM11.5 million for FY2019 (2018: total revenue and loss before tax of RM10.5 million and RM12.2 million respectively). The decrease in revenue was mainly due to slower construction progress of Picasso Residence project. The overall decline in revenue for the Property Division was partially offset by the revenue generated from Embayu @ Damansara West project starting from third quarter of 2019. In July, the Group entered into a conditional share sale agreement for the proposed disposal of 60% equity interest in PDMSB by PRG Property Sdn. Bhd., a wholly-owned subsidiary of PRG, for a cash consideration of RM7.2 million. PDMSB is the developer for Picasso Residence, in view of the oversupply situation that has led to a stagnation in the property development industry especially those in the high-end segment, we believe that the disposal would enable PRG to shift its focus on developing affordable homes targeting the middle- income households. As for the Healthcare Division, it recorded a loss before tax of RM6.1 million as a result of the impairment losses of investment in its associate amounting to RM1.4 million and impairment losses of investment in its joint venture of RM3.9 million during the financial year. 3. Retail Division The Group had ventured into retail business in the second quarter of 2018 and became an authorised dealer of the luxurious apparel brand “Philipp Plein” in Singapore, Malaysia, Thailand and a few approved additional territories. The first flagship store was opened in Marina Bay Sands, Singapore in April 2019, which is the first “Philipp Plein” store in South East Asia. The second store which is 49% owned by the Group, was opened in IconSiam Bangkok, Thailand in July 2019. The Retail Division recorded a revenue of RM6.4 million and loss before tax of RM7.7 million during the financial year, mainly due to substantial marketing expenses for grand opening events, marketing initiatives and promotional events to reach out to the local customers as well as tourist traffic in order to promote the brand in South East Asia. MANAGEMENT DISCUSSION AND ANALYSIS cont’d