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Falling Knife of the Week: Linair Technologies Limited

This week’s Falling Knife is Linair Technologies Limited (SGX: 5FW), which has fallen 22.2% to close at S$0.028 for the week.

The firm provides one-stop environmental solutions and integrated services to the semiconductor, wastewater treatment, chemical, pharmaceutical and biotechnology industries, among others. Furthermore, Linair is a building services and engineering solutions provider specialising in the design, installation, testing and commissioning of Air-Conditioning and Mechanical Ventilation and Electrical Systems.

At the end of last month, the company released its full year results. It reported a revenue decline of 15.5% to S$28.7 million and a net loss of S$2.5 million. In the previous year, its losses were higher at S$2.6 million so Linair managed to do a tad better in 2013.

The slip in revenue was mainly attributed to the decrease in sales in the Singapore engineering segment, on the back of fewer projects secured and delays in projects.

Looking at the balance sheet, as of 31 Dec 2013, the company was in a net cash position of S$8.2 million. This figure breaks up into a cash balance of S$8.8 million and total borrowings worth S$0.66 million.

Despite not making a profit in 2013, the net cash generated from operations for the full year was at S$1.4 million. In the previous year, the firm used net cash from operations of S$2.7 million. The improvement was mainly because of a decrease in working capital needed.

Looking ahead, Linair expects the intense competition in its businesses to persist and will continue to be vigilant in managing costs. It will also seek ways to either grow organically or via acquisition.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Sudhan P doesn’t own shares in any companies mentioned.