MAINBOARD-listed company Second Chance Properties’ net profit for the first half (H1) of its financial year ending Feb 28, 2023, doubled to S$9.2 million from S$4.6 million in the year-ago period.

This was mainly due to a gain of S$4.33 million on disposal of investment properties, the group said in a bourse filing on Wednesday (Mar 29).

The group deals in retailing ready-made garments, holds property as investment for rental income and invests in securities. It sold seven investment properties since the end of the last financial year.

The same reason that contributed to the rise in profits is, however, associated with a drastic 29.4 per cent or S$640,000 drop in rental revenue from properties to S$1.5 million.

This business segment contributed to an 8 per cent or S$1.3 million drop to its H1 revenue, which came in at S$14.8 million, from S$16.1 million a year ago.

Also contributing to the topline decline was a 10.9 per cent drop in revenue derived from its gold business segment. The segment brought in S$9.3 million in H1, owing to “general market conditions”, versus S$10.4 million a year ago.

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The group reported a negative working capital of S$40.4 million as at Feb 28, as it utilised short-term borrowing facilities, which come with a flexible repayment schedule.

Commenting on factors or events that may affect the group in its next reporting period and the next 12 months, it said its gold business would continue to remain profitable and operate in company-owned premises in City Plaza.

While rental income has fallen and will decrease further due to the disposal of seven investment properties, dividend income should increase significantly, as the group continues to add more high-yielding dividend stocks to its portfolio, it said.

“Market forces, interest rates as well as government stimulus measures will continue to determine the performance of the financial instruments sector,” it noted.

No dividend has been declared for the half year, as the management has decided to declare it at the end of the financial year with the full-year results announcement.

Shares of Second Chance Properties closed flat at S$0.245 on Wednesday.