New stores helped boost the numbers at supermarket chain Sheng Siong in the fourth quarter. Earnings shot up 23.9 per cent to $14.6 million in the three months to Dec 31, it reported yesterday, while revenue rose 4.9 per cent to $187.1 million from the same period a year ago.
The firm said the new stores contributed 6.6 per cent to fourth-quarter turnover, which was partially offset by comparable same store sales dipping 1.7 per cent.
Sheng Siong added: "Renovation done to the big store at Clementi and worsening demand conditions seemed to have aggravated the decline in comparable same-store sales in the fourth quarter."
Net profit for the full year came in at $56.8 million, up 19.3 per cent, and turnover advanced 5.3 per cent to $764.4 million, on the back of new stores opened in 2014 and last year. Some new stores include those at Block 527D in Pasir Ris in the east and Block 85 Dawson Road in the west.
The firm noted gross margins rose to 24.7 per cent last year, compared with 24.2 per cent a year earlier, adding that selling prices were mostly stable.
"Opportunities to improve input costs continued to exist in the year, aided mostly by the global over-supply situation, weakening of emerging currencies which led to price discounts in cases where the suppliers invoice in Singapore dollar, and various margin enhancing initiatives taken by the group," added the firm.
AT A GLANCE
NET PROFIT: $14.6 million (+23.9%)
REVENUE: $187.1 million (+4.9%)
FINAL DIVIDEND PER SHARE: 1.75 cents (+16.7%)
Administrative expenses increased by $7.8 million owing to higher staff costs, as more employees were required for the new stores, as well as a higher bonus provision from the firm's improved financial performance last year.
Cash generated from operating activities, before working capital changes and payment of tax, was $79.9 million, in line with its better operating performance.
While Sheng Siong said it will continue to seek new sites for stores, competition for retail space is challenging.
However, it recently successfully bid for a space of about 3,500 sq ft at Block 188 Circuit Road, and is waiting for the HDB to execute the lease.
Earnings per share for the full year was 0.97 cents, up from 0.78 cents a year earlier, while net asset per share was 16.24 cents as at Dec 31, up from 15.71 cents a year ago.
Total dividend for the year was 3.5 cents per share, up from 3 cents previously.
Chief executive Lim Hock Chee said: "We are pleased to be back on track for our store expansion plans with the opening of five new stores last year, bringing the total number of our stores to 39 with a total retail area of 431,000 sq ft.
"We will also remain focused on driving cost efficiency, amid the challenging business environment, by increasing direct and bulk purchasing, leveraging on our Mandai distribution centre."
Sheng Siong shares closed flat at 86.5 cents yesterday.