SINGAPORE (March 29): Second Chance Properties saw a 10.9% drop in 1H17 net profit to $3.2 million from $3.6 million a year ago on lower sales across all divisions.
Group revenue for six months ended Feb fell 9.6% to $15.1 million. Revenue from apparel business decreased by 33.2% to $2.42 million. Of the $1.20 million decrease, Malaysian operations contributed $1.04 million decrease. The closure of 12 shops in Malaysia since the end of 1H16, the weakening Malaysian Ringgit and intense competition there, all resulted in the decreased revenue. In Singapore, the revenue from this segment decreased by $0.16 million on account of closure of one shop since the end of 1H16.
The revenue from gold business increased by 6.6% to $7.31 million due to better performance in 2Q17. Rental income from properties decreased by 11.97% to $3.75 million. There was a loss of rental income on account of sale of four investment properties since the end of the prior period as well as lower rentals received on some lease renewals.
The sale of a few fixed income securities since the end of 1H16 resulted in decrease in revenue by 17.8% to $1.57 million in 1H17 for the securities business.
Other losses consisted mainly of unrealised foreign exchange losses. In 1H17, because of the depreciating Malaysian Ringgit, the unrealised foreign exchange loss was $0.79 million as compared to an unrealised loss of only $0.06 million in 1H16.
At end Feb, cash and cash equivalents was $4.85 million down from $5.49 million at Aug 31 2016.
For the 2Q ended Feb, net profit rose 79% to $1.98 million from a year ago although revenue fell 9.43% to $7.6 million.
In its outlook, Second Chance Properties says the retail industry continues to be negatively affected by the tight labour situations, online sales and overseas shopping by Singaporeans which is also affecting our apparel business in spite of more optimism that the economy will improve in 2017.
“Our apparel business in Malaysia continues to be affected by the weakening Ringgit and poor consumer spending. The gold business is expected to continue to be profitable. Our rental income will be lower due to the weakening rental market and the sale of several shops. Interest rates are expected to continue their upward movement. Market forces will continue to determine the performance of the financial instruments sector,” adds the group.
The counter closed flat at 25 cents before the results announcement.
