SINGAPORE (Aug 11): Courts Asia, the retailer of electrical, IT and furniture products, announced a 1QFY17/18 net profit of $6.1 million for the quarter, down 31.6% from the $8.8 million it posted a year ago on lower revenue and higher expenses.
Revenue for the quarter fell 4.5% to $186.6 million from $195.3 million in the previous year due to lower contributions from Singapore on the back of lower sales of goods and earned service charge income.
In Malaysia, Hari Raya sales fell short of expectations as a result of weak consumer spending. In addition, the credit collection environment in the country remains challenging given the slower economy
Meanwhile, the group registered revenue improvement in Indonesia over the quarter from contributions from newly-opened stores.
Meanwhile, distribution & marketing and administrative expenses increased by $0.2 million and $1.6 million respectively, mainly due to higher warehousing expenses in Singapore and higher branch salaries for newly opened stores in Malaysia and Indonesia.
Looking ahead, the group says it intends to expand solutions-selling in all categories, transform its physical stores into experience centres with the ‘next-generation’ concept, and drive its omni-channel strategy.
“Given the weak retail outlook, we need to be relentless on maintaining the right cost structure. Expenses for this quarter included operating costs for new store rentals, investment in new hires as well as warehouse costs for increased stock,” says executive director and group CEO, Terence Donald O’Connor.
“Through internally-generated initiatives, we continue to be focused on driving cost and margin efficiency measures, as well as improving operational excellence.”
Shares in Courts Asia closed flat at 42 cents on Friday.
