SINGAPORE (June 28): Courts Asia saw earnings more than treble to $23.7 million for the FY16/17 ended March, compared to a restated FY15/16 net profit of $6.8 million.
Revenue for the full year slipped 1.5% to $740.5 million, from $751.9 million a year ago. This was mainly due to lower sales of goods, offset by higher earned service charge income.
Revenue from Singapore, which made up 66.3% of Courts Asia’s topline, slid by 2.7% to $491.0 million compared to last year while revenue in Malaysia, which contributed to 30.3% of the group’s revenue, reported a 1.6% increase in Ringgit currency on a year-on-year basis.
Both were mainly due to lower sales of goods offset by higher earned service charge income. The group’s Indonesia operations registered a 57.0% jump in revenue in Rupiah currency, primarily due to contributions from newly opened stores. Indonesia accounted for 3.4% of the group’s overall revenue.
Gross profit grew 5.7% to $268.4 million in FY16/17, from $254.0 million a year ago, as a result of higher gross profit margins.
Distribution and marketing expenses fell 9.5% to $56.2 million, largely attributable to lower advertising cost.
Finance expenses fell 18.8% to $20.8 million, mainly due to lower exchange loss and lower interest expenses in Singapore, partially offset by higher interest expenses in Indonesia and Malaysia due to increase in bank borrowings.
Cash and cash equivalents stood at $93.8 million as at March 31, 2017.
Courts has proposed a final dividend of 1.29 cents per share for FY16/17 – unchanged from the last two financial years.
The group applied the new Singapore Financial Reporting Standard 115 Revenue from Contracts with Customers (FRS 115) issued by the Accounting Standards Council to its FY16/17 financial statements.
“A portion of our business revenue is attributable to services as well as credit bundle sales, which are impacted under the new FRS 115 rule. As we deem the impact to be material, we made the decision to early adopt FRS 115 as we believe it is in the best interest of our shareholders to do so,” says Courts’ executive director and CEO, Terence Donald O’Connor.
Looking ahead, Courts says it expects challenges to persist in the retail environment even though economies have projected slight improvements.
However, it adds that it remains optimistic in the longer term, due to improving consumer sentiment in Singapore, Malaysia and Indonesia.
“The group remains focused on its ongoing cost efficiency measures for sustainable efficiency management and will continue to drive its omni-channel strategy across all key markets,” says O’Connor.
Shares of Courts Asia closed flat at 42.5 cents on Wednesday.
