Hour Glass full-year earnings up 5% on higher revenue
Group's focus on retail network quality, product mix and costs pays off
Singapore
DESPITE a contracting regional luxury market, The Hour Glass on Wednesday clocked up a 5 per cent increase in net profit to S$57.9 million from S$54.9 million a year ago for its financial year ended March 31, 2015.
Full-year revenue for the luxury watch retailer climbed 8 per cent to S$734.9 million, from S$682.8 million.
The group's performance for the year was thanks to its emphasis on improving the quality of its retail network and merchandise mix, as well as "rigorous attention" to cost management, The Hour Glass said in a press release.
Its results were delivered against a backdrop of slower macroeconomic growth in Asia and a tapering of spending by mainland Chinese on luxury goods.
Gross margins were stable at 22.6 per cent, a slight drop from the preceding year's 23 per cent.
The group did not provide a separate set of results for its fourth quarter.
Group managing director Michael Tay said: "Navigating a unique specialist luxury watch retailer like The Hour Glass through a demanding business environment requires consistency and tenacity."
The group's network development strategy will centre on new store openings, expansion of its newly acquired Watches of Switzerland brand, and store refurbishments.
In Singapore, the group recently opened a Girard-Perregaux boutique at Marina Bay Sands, after securing the exclusive distribution and legal rights for South-east Asia. In the first half of FY2016, the group is also opening a multi-brand store at the Paragon shopping centre.
In Malaysia, two retail stores will open in Kuala Lumpur. In Thailand, a boutique will open in Bangkok's Emquartier shopping complex.
The continuing global economic and political uncertainty is expected to affect consumer sentiment and the demand for watches and luxury goods. Barring any unforeseen circumstances, the group expects to remain profitable in FY2016.
Earnings per share worked out to 8.22 Singapore cents, up from 7.79 Singapore cents, the latter after retroactive share base adjustment for comparison because of a 1-into-3 share subdivision. Net asset value per share fell to S$0.58 from S$1.56 because of the share subdivision.
The group proposed a first and final dividend of 2.2 Singapore cents a share. The Hour Glass counter closed unchanged at S$0.81 on Wednesday, before results were announced.
