Spindex Industries

[dydx]

Selling expenses rose quite a fair bit. Capex also rose significantly.

Distribution and selling expenses actually fell 7%, from $740k in H1-FY10, to $690k in H1-FY11. The reduction in OP and PBT was mainly due to an increase in administrative expenses to $5.28m (up 26%, from $4.207m in H1-FY10), which included a much large forex loss (net) of $1.285m (vs. a smaller loss of $433k in H1-FY09).

The seemingly larger-than-normal capex of $4.872m incurred in H1-FY11 was anticipated, as it was mentioned in both the FY10 results announcement and AR. When Chairman Tan Choo Pie decided to spend some $5.0m on capex in FY11 "to replace as well as expand production capacity to meet growing demand from customers" (as mentioned in his Chairman's Statement in the FY10 AR), should Spindex's shareholders get overly worried?