Challenger posts 10% rise in Q2 earnings

CHALLENGER Technologies Limited reported 8 per cent higher revenues for both H1 2016 and Q2 2016, ended 30 June, compared with the corresponding periods last year. This was driven by an improved performance from its corporate sales, trade show activities, and growing sales from its Hachi.tech online marketplace launched earlier in April this year.

Net profit for the quarter was up 10 per cent at S$3.8 million from 3.4 million for the year-ago period. This was due to the stronger gross profit, reduced rental from the rental rebate given by Funan DigitaLife Mall, and higher government grants received. These were offset by higher staff costs and other operating expenses incurred to start and grow Hachi.tech.

Chief executive Loo Leong Thye said: "Hachi.tech presents a strong platform for us to reach a wider market and an evolving customer base which shops via multiple channels today. Today, we don't have the physical constraints of a brick-and-mortar store because we can list an ever-growing range of products that a customer can buy anytime, anywhere. In the coming months, Hachi.tech will see more improvements in order to better serve our members."

Despite the closure of its flagship megastore in Funan DigitaLife Mall on June 30, Mr Loo said that this did not dampen sales as the group still operates a total of 44 stores comprising 23 Challenger superstores and 21 small format stores in Singapore.

"We had a successful closing sale after operating in Funan for more than 20 years. Despite Funan's closure, we did not experience a significant revenue drop as our customers are already familiar with our large network of over 40 other stores where they can shop at.

"We will continue to open new retail stores that have suitable locations and rentals, as well as right-size or end leases on stores that are not performing up to our expectations in this soft retail climate."

The counter last traded on July 29 , closing at S$0.48.