Challenger H2 profit falls 38%, but proposes higher final dividend

CHALLENGER Technologies reported on Thursday (Feb 17) lower net profit and revenue for its second half.

Net profit for the IT product retailer fell 38 per cent to S$8.4 million during the six months ended Dec 31, 2021, down from S$13.6 million in the prior-year period.

This came on the back of slightly lower revenue of S$147.4 million during the period, down 3 per cent from a year earlier.

For the full year, revenue grew 5 per cent on year to hit S$238.2 million in FY21, coming off a lower base as stores were closed during the "circuit breaker" period of Covid-19 restrictions in FY20.

The company noted that retail sales rose by S$25.9 million largely due to the easing of restrictions and a resumption in economic and business activity across the region, offset by lower online sales and corporate sales of S$13.1 million.

The group's net profit for the full year stood at S$17.8 million, down 23 per cent compared with FY20.

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"The lower profit achieved was largely due to reduced Covid-19 related government support and higher operating expenses incurred," Challenger said, adding that if government wage and rental support are excluded, group profit before tax in FY2021 would have been lower than FY2020 by S$0.4 million.

Earnings per share for the full year stood at S$0.0501, down from S$0.0673 in FY20.

A final dividend of S$0.028 per share was declared, up from the S$0.027 final dividend a year ago. This will be payable on May 20.

Challenger said the retail sector "continues to remain challenging amidst the constantly evolving and uncertain Covid-19 situation both locally and globally".

The group added they will continue to focus on driving productivity, ramping up e-commerce engagement and enhancing their overall product range.

"While pursuing growth, the group will continue to take steps to improve our operational efficiencies and further strengthen our balance sheet and liquidity to fund growth and to deliver shareholder return," Challenger added.

As of Dec 31, 2021, net asset value per ordinary share stood at S$0.40, up from S$0.35 a year earlier.

The counter closed unchanged on Thursday at S$0.56, before the results were announced.