SINGAPORE (Feb 27): Best World International, which has ordered an independent review of its business and accounting practices after questions were raised about the lack of clarity on how its franchisees operate in China, reported 4Q18 earnings rose 28.9% to $28.1 million from a year ago.
The stronger bottomline comes as the direct-selling company and seller of premium skincare products to franchisees in China transitions from an export model to a franchise model in the China market.
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When completed, the findings from the independent review will be published and reported to its audit committee and to the Singapore Exchange RegCo, said Best World.
Best World added it had conducted its business ethically and in compliance with the law, but "is not responsible for the accounting and sales records of the franchisees, who are independent third parties".
In its Tuesday night filing, Best Wolrd said revenue for 4Q18 jumped 78.6% to $127.7 million. About 62% of its revenue came from its franchise segment, while the other 37% came from its direct-selling model.
Gross profit for 4Q18 more than doubled to $99.77 million from a year ago, translating into a gross profit margin of 78.2%, an improvement of 11.5 percentage point.
Net profit margin for 4Q18 fell to 22% as distribution costs increased to $40.8 million compared to $13.6 million a year ago on sales-related expense from the franchise segment, commissions under the direct-selling segment, and higher convention expenses.
Best World is proposing a final dividend of 4.2 cents per share, as well as a special dividend of 0.8 cent per share. A year ago, Best World had proposed a final dividend of 2.6 cents per share.
As at 4.14pm, shares in Best World are up 0.5 cent at $2.58.
