Financial Position and Capital Management Financial Position The Group’s focus on financial discipline helped preserve a sound balance sheet in FY2026, with borrowings reduced and operating cash outflow narrowed substantially, providing a stable foundation for the Group’s next phase of growth. As at 30 June 2026, the Group’s total assets stood at RM353.07 million, versus RM373.29 million in FY2025. The decrease reflected mainly lower cash and bank balances, inventories and trade receivables. This was partly offset by contract assets, which more than doubled as work performed under the Group’s rail maintenance contracts accumulated ahead of billing. Total liabilities declined over the same period, mainly reflecting lower other payables, contract liabilities and bank borrowings, partly offset by higher tax payable. Shareholders’ equity rose to RM143.17 million, compared with RM137.03 million a year earlier, while net assets per share stood at RM0.26 versus RM0.25 in FY2025. The increase reflected a favourable movement in the translation reserve and profit retained during the year, with share capital unchanged. Cash Flow and Liquidity Net cash used in operating activities narrowed to RM2.86 million, compared with RM52.87 million in FY2025. The improvement reflected mainly the collection of trade receivables, against a significant build-up in the previous year, together with a further reduction in inventories. These inflows offset a substantial part of the working capital absorbed by contract assets as rail programmes progressed. Capital expenditure was contained at RM9.16 million, compared with RM11.24 million in the previous year. Financing activities recorded a net outflow of RM10.02 million, mainly reflecting interest payments, net repayment of bank borrowings, lease payments and the dividend paid, partly offset by the release of previously pledged deposits. Cash and bank balances, including deposits with licensed banks and bank overdrafts, stood at RM21.60 million against RM47.94 million recorded a year earlier. The Group maintained adequate liquidity, with a current ratio of 1.52 times versus 1.43 times in FY2025. Borrowings, Funding and Capital Structure In line with its focus on financial discipline, the Group reduced total bank borrowings to RM63.51 million, versus RM70.40 million in FY2025. The borrowings consist mainly of short-term revolving credit facilities used to finance short-term working capital requirements. Finance costs were broadly unchanged year-on-year. Net gearing stood at 0.32 times, providing a sound platform from which to pursue the Group’s priorities. As at 30 June 2026, the Group had total banking facilities of RM423.24 million, of which RM267.34 million remained undrawn. Capital Allocation and Shareholder Returns The Group will continue to allocate capital prudently, ensuring that growth is funded responsibly. Capital will go first to Mobility capability and accreditation, where returns are contracted and visibility is longest. Energy will scale through a partnership-led model of joint ventures, consortiums and revenue-sharing arrangements, enabling growth without straining the balance sheet. Management will continue to strengthen working capital management and the recovery of public sector receivables, while the strategic review of Marine will guide future portfolio and resource allocation decisions. During the year, the Group paid an interim single-tier dividend of 0.50 sen per share, amounting to RM2.74 million. The declaration reflects the Board’s confidence in the Group’s underlying fundamentals and long-term prospects. Going forward, the Group remains committed to returning value to shareholders through capital growth and future dividends, while maintaining the financial discipline that underpins its priorities. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) DESTINI BERHAD 38 ANNUAL REPORT 2026
RkJQdWJsaXNoZXIy NDgzMzc=