The Hour Glass' full-year net profit drops 10% to $52m

Malmaison by The Hour Glass in Orchard Road. The company said in its report that the global economic outlook has impacted overall sentiment. It anticipated a tightening of global demand for luxury goods, although it remains "cautiously optimistic".
Malmaison by The Hour Glass in Orchard Road. The company said in its report that the global economic outlook has impacted overall sentiment. It anticipated a tightening of global demand for luxury goods, although it remains "cautiously optimistic".PHOTO: THE HOUR GLASS

Softer global demand for luxury goods and deteriorating consumer sentiment made a dent in The Hour Glass' full-year earnings. Net profit fell 10 per cent to $52.3 million for the year to March 31 while revenue slid 4 per cent to $707.5 million.

The company attributed the profit fall to a generous $5 million donation made to advance special needs, community and cultural causes in Singapore, in conjunction with the nation's 50th birthday last year.

"That our company has benefitted from the tremendous economic success of this nation inspires us to make an even more impactful contribution to Singaporean society," said Mr Michael Tay, group managing director of The Hour Glass.

There was a silver lining in the form of rising margins. The company reported gross margins rising to 23.7 per cent, up from 22.6 per cent a year earlier - a rise it attributed to its focus on managing its retail brand, merchandise portfolio and dynamic pricing initiatives.

Mr Tay said: "The Hour Glass has navigated through many challenging periods in its history and FY2016 was one such period where consumer spending continued to trend lower and the economic sentiment remained weak."

  • AT A GLANCE

  • REVENUE:

    $707.5 million (-4%)

    NET PROFIT:

    $52.3 million (-10%)

    EARNINGS PER SHARE:

    7.42 cents (-10%)

The company said in its report that the global economic outlook has impacted overall sentiment. It anticipated a tightening of global demand for luxury goods, although it remains "cautiously optimistic".

Earnings per share was 7.42 cents, down from 8.22 cents a share a year earlier. Net asset value per share was 62 cents as at March 31, up from 58 cents a year earlier.

The firm proposed a dividend of two cents per share for the year.

The Hour Glass shares closed flat at 75 cents yesterday. The results were released after market close.

Lee Xin En

A version of this article appeared in the print edition of The Straits Times on May 25, 2016, with the headline 'The Hour Glass' full-year net profit drops 10% to $52m'. Print Edition | Subscribe