SINGAPORE - Fresh from its expansion into the moneylending business, pawnbroker ValueMax Group expects to set up two more outlets in Malaysia, taking the number of operating outlets in Singapore and Malaysia to 30 by the end of 2014.
The company said this even as it reported a 43.9 per cent decline in third quarter net profit from $3 million to $1.7 million.
Revenue for the three months ended Sept 30 increased 7.5 per cent to $87.6 million, due to an increased contribution of S$7.5 million for the retail and trading of pre-owned jewellery and gold business, offset by a $1.3 million fall in revenue from he pawnbroking business.
"Weaker gold prices have slowed our pawnbroking business for this quarter but our retail and trading of pre-owned jewellery and gold business has improved over the same period last year," Mr Yeah Hiang Nam, managing director and chief executive of ValueMax said.
"Our unique competitive advantage in our new moneylending business makes us poised for expansion in this sector."
At the beginning of October, gold price fell below US$1,200 per ounce.
The pawnbroking business continues to face increasing competition and this is expected to continue in the foreseeable future.
In order to broaden the group's revenue base and grow its lending business, it entered the moneylending business with acquisition of VM Credit.
The acquisition affords the group a moneylender's licence, which allows it to grant secured loans against collaterals such as properties.
VM Credit has entered into several loans contracts amounting to $9.6 million since the acquisition, of which $3.1 million has been disbursed to-date.