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Challenger Q2 net profit up 3% to S$4m

CHALLENGER Technologies' net profit edged up 3 per cent to S$4 million for the second quarter ended June 30, up from S$3.9 million in the year-ago period, it reported on Friday after the market closed.

Revenue for the quarter was down a marginal 3 per cent year-on-year to S$76.2 million from S$78.8 million, due mainly to lower online sales, offset by stronger growth in retail, trade show and corporate sales.

Earnings per share for the quarter were 1.16 Singapore cents, compared to 1.13 Singapore cents for Q2 2017.

Challenger has recommended an interim dividend of 1.1 Singapore cents, to be paid by Aug 24, in line with the dividend recommended for the same period a year ago.

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The latest results took Challenger's first-half net profit to S$9.3 million, up 31 per cent year-on-year from S$7.1 million. First-half revenue was down one per cent at S$153.8 million, from S$155.1 million.

Challenger said that towards the end of the second quarter, it noticed a slowdown in retail sales. "This challenging operating environment is expected to continue on into the second half of 2018," it said in a media release on its results.

In anticipation of this, Challenger had already planned to open two new retail concepts by the end of 2018, to reach a more diverse group of customers. By August, PIT.money will open at JCube, stocking end-of-life, demo and trade-in IT products. By December, Musica.Boutique will open at ION Orchard, offering mid- to high-end audio products.

Another Challenger superstore is due to open in Paya Lebar Quarter, with the mixed development's retail mall expected to open in early 2019. Challenger currently has a total retail network of 37 stores in Singapore.

Challenger shares closed unchanged at 49 Singapore cents on Friday before the release of results.

Amendment note: An earlier version of this article stated that another Challenger superstore at Paya Lebar Quarter is due to open in the fourth quarter of 2018, per Challenger's results release. Paya Lebar Quarter by Lendlease has since clarified that its retail mall is expected to open in early 2019. The article above has been revised to reflect this.