Chairman's Statement

The financial year ended 30 June 2025 unfolded against a complex global backdrop of heightened global uncertainty, shaped by unresolved geopolitical tensions and swift escalation of trade conflicts. These challenges weighed on export-dependent economies worldwide. Even so, Singapore’s economy demonstrated resilience, expanding by 4.4% in 2024, compared to 1.8% in the preceding year.

The construction sector continued its recovery momentum, growing by about 4.5% in 2024, with growth accelerating to 6% in the second quarter of 2025, supported by robust public sector demand.

Amid these conditions, the Group navigated the challenging business environment with resilience. Leveraging our established track record, diversified capabilities, and disciplined cost management, we delivered our strongest financial performance since the pandemic. Despite persistent industry headwinds such as manpower constraints and rising costs, and a moderation in core divisional revenues compared to the previous year, the completion of several construction and restoration and fit-out projects provided a significant boost to profitability. For FY2025, all business divisions contributed to a net profit attributable to shareholders of S$15.6 million, more than doubling from S$7.4 million in the previous financial year.

FY2025 was also a milestone year for the Group. Following months of preparation, our specialist interior contracting arm, LCC, was successfully listed on the Catalist Board of the SGX in July 2025, shortly after the close of our financial year. The IPO received overwhelming market support, with strong interest from various institutional investors and was approximately 47.3 times subscribed by retail investors.

With the milestone listing of LCC and in appreciation of our shareholders’ continued trust and support, the Board has recommended a final ordinary dividend of 1.0 cent per share and a special dividend of 1.0 cent per share for FY2025. Together with the interim dividend of 2.0 cents per share paid in March, this represents a total dividend payout of 4.0 cents per share for the financial year – markedly higher than the 1.5 cents declared for FY2024. The proposed final ordinary dividend and special dividend, subject to shareholders’ approval at the upcoming Annual General Meeting, reflects our commitment to delivering sustainable returns while maintaining a prudent capital position to support the Group’s long-term growth.

For FY2025, our Property Division maintained a resilient performance, delivering revenue of S$14.4 million, compared to S$22.1 million in the previous year, underpinned by prudent cost management and ongoing tenant engagement.

Our joint venture, Tekka Place, closed the financial year with committed occupancy of 82%. We continue to actively engage prospective tenants to lease remaining units. Complementing these efforts, we are sustaining targeted promotional campaigns to increase footfall and enhance tenant sales performance. Meanwhile, Tekka Place’s apart’hotel, Citadines Rochor Singapore, delivered another year of robust performance, achieving an average occupancy of 85% over FY2025.

In Malaysia, the housing market remained stable throughout 2024. While transaction volumes were moderate, sustained demand persisted for quality landed properties. During the year, the Group did not launch any new phases but successfully sold three semi-detached homes and seven bungalows, reflecting continued interest in our development.

Our core construction business remains our largest revenue driver, contributing S$342.1 million in revenue, which is approximately 74% of total revenue for FY2025. The division continued to concentrate on on-time delivery of projects during the financial year.

Capitalising on its strong fundamentals, proven construction track record and competitive advantage, LCBC clinched three construction contracts during FY2025, ranging across mixed-use developments and a hotel. These new projects include Robertson Opus, Hotel Indigo at Changi Airport, and 51 Anson Road. Together with ongoing projects, these awards bring LCBC’s current order book to approximately S$980.0 million, supporting robust revenue outlook and reinforcing its position as a leading construction player.

In August 2025, the Group also entered into a joint venture to undertake civil, structural and architectural works in northern Singapore. Meanwhile, Mandai Rainforest Resort received its TOP in December 2024, and its muchanticipated official opening took place in April 2025.

LCBC also advanced its digital strategy expanding the use of digital tools to drive productivity, safety and decisionmaking. Building on momentum from previous years, it has digitalised business and operational control processes, enabling real-time tracking and management of operations. In addition, LCBC has incorporated the use of pythonbased automation scripts to streamline HR functions, tender preparation, and administrative tasks, reducing manual workload and minimising errors. These initiatives not only improve operational efficiency, but also free up staff to focus on higher-value work. LCBC will continue to explore emerging technologies, including AI, to further improve efficiency, support quality project outcomes, while safeguarding the safety of its staff.

To cap off an exciting year, LCBC, in recognition of its outstanding work on the Mandai Rainforest Resort, was honoured with BCA’s Project of the Year Award 2025. This prestigious accolade is presented to exemplary projects that demonstrate commitment towards transformation in sustainability, Advanced Manufacturing and Assembly, Integrated Digital Delivery, Manpower and Value Chain Collaboration.

We also remained steadfast in our commitment to ensuring safety across all our work sites. In recognition of these efforts, LCBC clinched the Gold Award at RoSPA’s Occupational Health and Safety Awards 2024, advancing from the Silver Awards it had achieved in recent years.

Following the successful spin-off of LC Interior from LCH, LCC, the immediate holding company of LC Interior, made a strong and well-received trading debut on the Catalist Board of SGX on 21 July 2025, marking an important milestone in the Group’s growth journey. The spin-off provides LCC with the strategic and financial flexibility to pursue growth opportunities, strengthen its market position, and enhance shareholder value. As the Group retains a 71% stake, LCC’s results will continue to be fully consolidated into the Group’s financial statements, while LCC will also prepare and publish its own annual reports going forward.

Despite upgrading Singapore’s GDP growth forecast for 2025 from zero to 2% to 1.5% to 2.5%, the Ministry of Trade and Industry (MTI) in its August 2025 report, warned that the second half of 2025 will remain challenging. Key risks include renewed tariff actions and escalating geopolitical tensions. MTI also noted that while Singapore faces the lowest baseline tariff rate of 10%, it remains vulnerable to spillovers from trade frictions.

Meanwhile, BCA in its January 2025 announcement, projected that construction contracts to be awarded in 2025, will range between S$47 billion and S$53 billion, higher than the S$44.2 billion in 2024. Adjusted for inflation, this translates to S$35 billion to S$39 billion in real terms, representing between 0.3% and 11.7% higher demand compared to pre-COVID levels in 2019.

This robust demand is expected to be fuelled by major upcoming developments including Changi Airport Terminal 5 (T5), Marina Bay Sands expansion, public housing projects and key infrastructure works such as MRT line extensions, the Woodlands Checkpoint expansion and Tuas Port development.

Over the medium-term, BCA expects total construction demand to reach an average of between S$39 billion and S$46 billion per year from 2026 to 2029, led primarily by public sector demand. These projects include public housing developments, T5, MRT projects, Tengah General and Community Hospital, Woodlands North Coast industrial estate and redevelopment of various Junior Colleges.

Looking ahead, today’s post-COVID global business landscape is being reshaped by geo-political risks, intensifying trade frictions and increasingly frequent catastrophic weather events. Despite these uncertainties, the outlook for Singapore’s construction sector remains steady. The Group will continue to be selective in the work it undertakes, focusing on quality tenders, disciplined cost management and strong project execution. Our strong financial position and performance place us well to seize opportunities as they arise, while we remain committed to prudent capital management to safeguard profitability and resilience.

In conclusion, I wish to record my appreciation for the wise counsel provided by my fellow Board Members. I also extend my thanks to our valued clients, shareholders, and business partners for their unwavering support and trust.

Last but not least, I express my gratitude to our team of highly committed staff whose efforts continue to propel the Group to new heights.

Thank you for your continued support and confidence in the Group. I wish you and your families continued good health and prosperity in the year ahead.