General discussion of results
FY year 2015-2016 was a good year. We grew our sales by 24%, our assets by 148%, and our equity capital by 89%. Our equity ratio stood at 31%, which is lower than last year’s 45% due to advance payments received towards the end of the March. Despite higher sales, however, our profitability declined due to changes in product mix, and higher marketing and investment expenses.
Over the course of the year we saw sudden and significant changes in the number of prospective businesses due to deteriorating geo-political environment. Double Turkish elections in June and November of 2015, downing of a Russian fighter plane in November 2015, Kurdish and Islamist terrorist attacks in Ankara and Istanbul have taken a heavy toll on investor and client sentiment.
In this segment pipeline clients for the Turkish market put their early stage business plans on hold following the deteriorating geopolitical environment. As a result, our high margin consultancy business did not perform as well as it did in 2014. Instead, we focused our efforts on an M&A and had our client and a prospective target sign an MOU paving the way to a manufacturing and shareholder partnership. On top of the consultancy fees, our contract entitles us for a success fees upon the completion of the deal.
Our royalty and trading business performed well as the channels we built for our legacy consultancy clients started to generate revenue in the earnest. As a result our sales went up yoy, thanks to major contributions from our royalty business in Philippines, making up for the declines in consultancy fees.
Considering the present ongoing situation in the Middle East don’t forecast any M&A or business consultancy business opportunities in Turkey for the short term. In order to maintain a sustainable business model we built local partnerships to provide factory and quality control audits for Japanese firms with local presence. We also forged a strategic alliance with a local logistic and security firm.