CORPORATE OVERVIEW

With our long and distinctive history of 78 years, POPULAR has established strong brand equity, huge purchasing power, extensive market knowledge and widespread fulfilment centres. These synergistic qualities form the bedrock of POPULAR’s foundation. To ensure that POPULAR has a comprehensive implementation plan to undertake the entire Educational Value Chain, we have embarked on an ambitious e-Learning initiative to complement our established physical network. This powerful interplay between our physical and virtual infrastructure would enable POPULAR to provide highly differentiated educational offerings to enter the e-Learning market. The four pillars of Retail, Publishing, School Network and e-Learning encapsulate our strategic thrust, which we term the “Popular Diamond Thrust”. With the time-tested fundamentals and financial strength, we are confident that the foundation for future growth is firmly in position.

Despite weak economic sentiment and the unfavourable operating environment, POPULAR’s revenue and profit have reached record levels. Turnover has risen 14% to S$314.1 million and net profit stands at S$12.7 million in FY2002. EBITDA has soared 10% to S$26.9 million. Earnings per share is at 2.82 cents. Net tangible assets per share increased 11% and stands at 23.17 cents.

Retail and Distribution have recorded pre-tax profit of S$2.7million on a 13% increase in turnover to S$251.7 million. Publishing has achieved pretax profit of S$13.9 million on a 17% increase in turnover to S$62.4 million. POPULAR’s continuously improving results since its listing in 1997 bear testimony to our commitment to build shareholder wealth to maintain market leadership.

RETAIL AND DISTRIBUTION

POPULAR’s strong brand equity, reputation for service excellence and conveniently located outlets offer us strong advantages in the intensely competitive market. Today, we have grown to a vast network of close to 90 outlets.

In FY2002, POPULAR has made great efforts to consolidate and to expand its relationship with its large pool of customers. Today, we have a membership base of 450,000. Through customer relationship management, we analyse our existing information in a bid to anticipate customer needs. We believe nothing is more vital to our business than a satisfied customer.

This year, leveraging on POPULAR’s strong brand equity, we extended our regional footprint into Taiwan by forming a partnership with Yuchen, the largest magazine distributor in Taiwan. Yuchen has formed strategic alliances with more than 200 local bookstores with which POPULAR will combine and consolidate to further strengthen our purchasing power. Such alliance enables quick market penetration and negates the need for capital investments in the setting up of retail operations.

We always believe partnership facilitates leadership by leveraging an organisation’s local brand equity and market expertise. This quick and cost effective way of expansion will form the new direction for POPULAR to enter into new markets like China. With our commitment to be the bilingual book distributor and retailer, our significant geographical coverage and our very strong purchasing and distribution power, POPULAR aims to be the central clearing house for both Chinese and English books in the Asia Pacific region.

PUBLISHING

With the extensive access to schools and to educational chains, comprehensive publishing capabilities and highly scalable content databank, POPULAR continues to be the market leader in text and supplementary books in Hong Kong, Macau, Singapore, Malaysia and Canada.

While looking for opportunities to acquire local publishers with good content, forming partnerships with established players to tap on their established network, we will continue to capitalise on our highly scalable bilingual content by directly exporting our publications into new markets such as Taiwan, China and Korea.

Going forward, by extending our market presence, we intend to be the leading bilingual publisher in the Asia Pacific region.

E-LEARNING

Ministries of Education around the world are asking for a revamp of the school textbook to make learning more interactive, collaborative and independent. With POPULAR’s established physical infrastructure, a wholly owned subsidiary, Popular e-Learning Holdings Pte Limited was incorporated to embark on an ambitious e-Learning initiative.

Forging strategic partnerships with world class product providers is an integral part of POPULAR’s strategy to quickly build up its comprehensive e-Learning consortium and to acquire an Asia Pacific presence. Investments in Litespeed Education Pte Limited, joint venture-Ednoland (HK) Limited, Town4kids Limited are vivid examples.

POPULAR will continue its rapid expansion through strategic partnerships with companies which have market coverage, market-leading products and services, rich and extensive content resources and wellestablished delivery platforms. The strategic thrust of our investment is to form the Popular e-Learning Consortium that positions it as “THE” leading provider of the best-of-breed e-learning services in Asia Pacific.

OUTLOOK

Operating conditions will remain difficult in FY2003. POPULAR will build on its many strengths and unique offering of its diamond thrust to improve performance. POPULAR will ride on the excellent and exciting opportunities created by e-Learning and tap on this momentum to further entrench its lead as well as to penetrate emerging markets.

Our efforts over the past years have demonstrated our ability to move quickly and decisively to deal with changing market conditions.

DIVIDENDS

The Board has recommended a final dividend of 5%, amounting to S$2.25 million for approval at the forthcoming Annual General Meeting.

ACKNOWLEDGEMENTS

In closing, I would like to recognise everyone who has made FY2002 such a commendable and defining year for POPULAR, in particular, our employees, our management team and our Board of Directors. We take pride in our staff at every level and thank them for their dedication and team spirit.

Finally, I would like to thank our customers, business associates, strategic partners and shareholders for their continued support to POPULAR. In this challenging environment, our solid track records and sound growth strategies have placed us in good stead to continue to deliver quality earnings in the future.

Chou Cheng Ngok
Chairman