Courts Asia has posted a second-quarter net profit of $6.7 million, up 11.3 per cent from a year earlier as productivity initiatives paid off despite a fall in revenue amid a subdued retail market.
Revenue for the three months ended Sept 30 fell 3 per cent to $180.5 million as the electrical, IT and furniture retailer's Malaysia sales tumbled 12.9 per cent (in Singdollar terms) to $57 million.
Singapore revenue was flat at $118 million while Indonesia revenue jumped 70.2 per cent to $6 million on contributions from newly opened stores.
In a statement, Courts Asia advised shareholders to look at the financial numbers on a half-year basis, which it said would be more representative since "this year's Hari Raya shifted forward a few weeks into early July, pulling festive buying into the first quarter''.
In the six months ended Sept 30, net profit jumped 33.6 per cent to $16.1 million as a better profit margin and cost management offset a 1.9 per cent revenue dip to $376.9 million.
Second-quarter earnings per share was 1.3 cents, up from 1.13 cents a year earlier. Net asset value per share was 56.4 cents as at Sept 30, up from 55.8 cents as at March 31.
AT A GLANCE
REVENUE: $180.5 million (-3%)
NET PROFIT: $6.7 million (+11.3%)
Group chief executive Terence O'Connor said the performance had been resilient, "in spite of the unforeseen recall of the Samsung Note7, which had a substantial lost sales impact on our business".
On its Singapore outlook, Courts expects consumer sentiment to dampen in the short term, but added that the increased supply of Housing Board flats could prop up demand for furniture and household appliances.
Indonesia continues to be a growth market, and Courts is on track to open two more stores there by March next year, bringing the total to nine.
Courts will also continue to take advantage of the softer rental climate in Malaysia to open four more stores there to hit 70 stores by March next year.
But Mr O'Connor noted the credit collections environment in Malaysia will stay challenging in the short term. "We will continue to remain vigilant and fine-tune our collections strategy to minimise impairment on our portfolio," he said.
Over the last three months, the group's trade and other receivables rose by 3.1 per cent to $556.2 million as at Sept 30 as credit sales increased.
Earnings were released after markets closed. The counter fell half a cent or 1.12 per cent to close at 44 cents yesterday.