Earnings of Thakral Corporation surged by over 3,600% to $8.95 million in 1HFY21 ended June, from the $241,000 recorded in the year before, following a significant jump in revenue.
On a fully diluted basis, the translates to earnings per share (EPS) of 6.84 cents, compared to 0.18 cents in 1HFY20.
With this, the group’s net asset value per share increased to $1.14 on June 30, from $1.13 on Dec 31.
Revenue for the first six months of the year jumped by 44% to $61.8 million following stronger performance across its business divisions.
Sales at its lifestyle division grew by 54% to $49.4 million thanks to robust growth in its lifestyle and fragrance product categories.
Its lifestyle products segment was boosted by its Hong Kong subsidiary’s appointment of DJI as an exclusive distributor for South Asia. With this the group will have presence in seven territories – instead of the one it previously had. In view of the lockdowns in some of the markets, the group says it will only see the full potential of this deal when markets return to normalcy.
Thakral’s fragrance products business also made progress with sales in 1HFY21 being 1.4 times that of FY2020.
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Meanwhile, its GemLife segment “performed satisfactorily,” the group reports in its results filing. This follows a buoyant residential market with buyers looking to move from inner cities to less congested locales.
The sale of houses at its 5 active resorts picked up, with house settlements in 1HFY21 being some 65% higher than the number sold in the previous year, without a reduction in selling prices.
The group also booked an unrealised profit from its investment in e-commerce start- up, Intrepid which completed its B-round funding at a higher valuation than the original investment by the Group.
Overall, revenue from Thakral’s investment division grew to $12.4 million, from $10.9 million previously.
Against this backdrop, cost of sales was up 49% to $43.5 million in 1HFY21, in line with the higher revenue.
Gross profit for 1HFY21 correspondingly came in at $18.3 million, 33% higher than the previous year.
The Group’s share of profits from associates and joint ventures improved significantly to $6.2 million reversing a loss of S$0.1 million in the previous corresponding period. The higher contributions include mainly the share of profit from its GemLife joint venture in Australia and unrealised net valuation gains on its Japanese property investments.
As at June 30, Thakral’s cash and cash equivalents stood at $5.59 million, down from $8.9 million in the previous year.
The group attributes this to the disposal of properties as well as a higher cash flow from operating activities which came in at $6.4 million in 1HFY21, compared to $5.6 million in the previous year.
Thakral has declared an interim dividend of 2 cents a share, up from the 1 cent per share paid out for the same period in the previous year.
“The year has started on a strong note for us as all our business segments did exceptionally well in the first six months - taking advantage of market opportunities to grow amidst challenging market conditions,” says independent non-executive chairman and lead independent director, Natarajan Subramaniam.
He points out that the group’s real estate investments have delivered strong performance. In Australia, the low interest rates and government stimulus fueled a sharp rise in property prices. This coupled with demand for more space and bigger homes drove demand for its retirement resorts.
Going forward, Subramaniam is banking on either a bottoming-out and/or recovery in Japan’s real estate market this year. He foresees that the country’s real estate investments with relatively high yields will remain attractive to investors, amid expectations that low interest rate policies will continue worldwide.
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Additionally, Subramaniam thinks that the Chinese economy will grow by over 8% in 2021, thereby bringing opportunities that Thakral can tap on.
As optimistic as he is, Subramaniam says the group is maintaining a cautious outlook for the rest of FY2021.
“We will always need to stay vigilant and nimble to adapt and take advantage of favourable opportunities and manage downside risks that may arise in the coming months,” he explains.
Shares in Thakral closed down a cent or 1.92% at 51 cents on Aug 5, before its results announcement.
Cover image: file photo
