Challenger Tech posts 11.6% fall in Q4 net profit of S$5.07m

CONSUMER electronics retailer Challenger Technologies posted shrinking fourth-quarter earnings on Thursday, with the bottom line challenged by how changes in inventories of finished goods swung into negative territory from the year before.

Net profit slipped 11.6 per cent year-on-year to S$5.07 million for the three months to Dec 31, 2019, while revenue was 1.1 per cent lower at S$83 million, as the growth in corporate, trade show and online sales could not make up for lower contributions from retail operations.

Earnings per share was 1.47 Singapore cents for the quarter, down from 1.66 cents. Net asset value stood at 29.8 Singapore cents a share against 26.65 cents before.

For the full year, net profit fell 9.4 per cent to S$17.6 million, even as revenue inched up by 2.9 per cent to S$329.6 million.

Challenger noted in its outlook statement that, while the retail sector, where it has 41 stores in Singapore, remains tough, it is looking to grow its electronic signage services businesses.

The board has recommended a final dividend of 1.5 Singapore cents a share, to be paid on June 5, with the books closing on May 14.

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The latest dividend is less than half of what was paid out in the previous year, when shareholders got 3.1 Singapore cents a share, including an interim dividend.

But the board said in its financial statements that, "in view of the uncertainty in the market outlook and business environment", its dividend proposal was thought to be "prudent", with both the global economic slowdown and the ongoing Covid-19 epidemic cited as factors.