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Second Chance Properties posts 66% fall in H2 profits to $914,000
SECOND Chance Properties saw a fall in net profit of 66 per cent year on year (yoy) for the six months ended Aug 31, to S$914,000.
Its full-year net profit, however, fell by only 6 per cent yoy to S$4.45 million. This was thanks to a strong H1 in which it posted a net profit of S$3.53 million.
The group's FY20 revenues decreased by 22 per cent yoy to S$23.95 million, from S$30.76 million in the preceding financial year.
This was mainly due to revenue losses in the group's apparel segment, as restrictions in Singapore and Malaysia to control the spread of Covid-19 kept shops closed during the normally bustling Hari Raya festive season.
The closure of one of the group's biggest Singapore outlets at the Tanjong Katong complex, along with price decreases, changes in consumer preferences, and the increasing trend of online shopping, also contributed to the decline.
As a result, full-year apparel revenues fell 65 per cent to S$1.76 million.
Rental revenue from the group's properties, meanwhile, fell by 35 per cent to S$4.2 million, primarily due to rental waivers stipulated under the Covid-19 (Temporary Measures) Act. Rental income was also lower following the disposal of two properties.
Revenues from its securities segment declined 16 per cent to S$3.58 million, mainly due to the loss of coupon income upon the redemption of bonds.
Covid-19 restrictions also affected the group's gold business, which posted a full-year revenue decline of 4 per cent. Sales volume decreased, although this was offset by a rise in gold prices in the second half of the year.
The surge in gold prices meant that full-year profits from this segment actually increased by 53 per cent yoy, or S$1.18 million, to S$3.41 million. This was the only segment to post an increase in net profit for the year.
Government support measures also boosted the bottom line. The group received $210,000 in wage support under the Jobs Support Scheme. Second Chance also received a property tax rebate of S$370,000, as well as a cash grant of S$320,000 in rental relief.
In commentary accompanying the release of its results, the group acknowledged an "unprecedented increase in economic uncertainties" as well as the challenge posed by intense competition and online shopping patterns.
"Returning to the pre-Covid era might not happen anytime soon, and the group will have to continue to adapt to the new challenges to ensure long term sustainability," it added.