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Courts Asia swings into S$3.1 m net loss in fiscal Q2

ELECTRICAL, IT and furniture retailer Courts Asia has posted a net loss of S$3.1 million in its fiscal second quarter, reversing from a net profit of S$1.5 million in the same period a year earlier, weighed down by lower gross profit margins and revenue.

Revenue in the three months ended Sept 30 fell 6.4 per cent to S$165.1 million. Singapore revenue, which accounted for 72.4 per cent of group’s revenue, dipped 4.8 per cent owing to lower earned service charge income and corporate sales.

Group chief executive Terence Donald O’Connor noted that the Singapore business achieved profit before tax (PBT) of S$3.4 million, up from S$3 million last year, after executing on its store transformation roadmap. It renovated its Ang Mo Kio store in October.

Malaysia revenue, which contributed 23.7 to group revenue, fell 11.9 per cent in Sing dollar terms and 16 per cent in ringgit terms on lower earned service charge income.

Courts Asia said: "Malaysia revenue came under pressure after the introduction of the Consumer Protection (Credit Sale) Regulations 2017 which saw consumer interest rates capped at 15 per cent per annum from January 2018. However, ongoing transformation work with a persistent focus on cost and productivity efficiencies in Malaysia reaped results, with Malaysia’s PBT crossing into positive terrain after two consecutive quarters of loss."

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Dr O’Connor said: “We are encouraged by the early signs of stabilisation in the Malaysia business. We have closed 10 underperforming stores since the start of our financial year in April and continue to review our store network performance. Impairment loss on trade receivables charged to the P&L (profit & loss statement) has also been on a declining trend from the fourth quarter ended March 31."

Dominic Wong was appointed group chief operating officer with effect from Oct 15, and will be prioritising his time to lead the strategic and operational transformation of the Malaysia business, the group said.

Second-quarter loss per share was 0.59 Singapore cents. In the second quarter last year, earnings per share was 0.29 Singapore cents. Net asset value per share was 37.3 Singapore cents as at Sept 30, from 44.7 Singapore cents as at March 31. 

Courts Asia shares rose 1.9 per cent or 0.3 cent to S$0.161 on Thursday before results were released after close of trading.

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