Challenger posts 32% rise in FY2020 net profit to S$23m

CONSUMER electronics retailer Challenger Technologies posted a net profit of S$23.2 million for its financial year ended Dec 31, 2020, in results announced Monday. This indicates a 32 per cent increase from the year-ago period.

Meanwhile, its revenue fell 18 per cent year on year to S$270.8 million, on the back of a decline in IT products and services business segment.

The mainboard-listed firm said this was mainly attributable to the absence of a trade show, a weaker performance from corporate sales and retail operations due to the lockdown imposed during the circuit-breaker period, as well as the existing government restrictions and safety-management measures put in place amid the pandemic.

Its IT products and services business segment fell 17.5 per cent to S$267.4 million in FY2020, compared with S$324 million in FY2019.

Revenue from its electronic signage services business segment fell S$0.4 million, mainly due to the absence of audio and lightings retail contribution, compared to FY2019. Further, as data management and marketing projects were put on hold amid the pandemic, revenue from its telephonic call centre and data management services declined 36.7 per cent.

Nonetheless, Challenger's fall in revenue was offset by its higher profit after taxation. This was mainly due to the fall in premises expenses, thanks to rental waiver and rebates. The decrease in other expenses, such as for employee benefits, selling and distribution expenses, as well as depreciation expenses and inventories provision, also contributed to the higher profits.

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Earnings per share stood at 6.73 Singapore cents for the full year, an increase from 5.11 Singapore cents in the year-ago period.

The board has recommended a final dividend of 2.70 Singapore cents for the period, an increase from 1.5 Singapore cents the previous year. The dividends will be paid on May 20, after books close on May 11.

"In view of the current evolving Covid-19 situation, the group will continue to exercise caution in managing overall business given various uncertainties at the macro level," said Challenger.

It added: "We will continue to improve on operational efficiencies and drive a greater e-commerce presence to mitigate any downside impact caused by the pandemic."

Shares of Challenger closed flat at S$0.48 on Monday, prior to the results announcement.