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ValueMax Q3 profit up 32% as clampdown on costs offsets sales drop
PAWNBROKER ValueMax Group posted a 31.8 per cent rise in its third-quarter net profit as lower cost of sales offset a revenue decline.
Net profit grew to S$2.2 million, or 0.42 Singapore cent per share, for the three months to September. For the first nine months of the year, net profit increased by 8.8 per cent to S$7.7 million, or 1.44 Singapore cents per share.
Revenue fell 21.7 per cent to S$68.5 million during the quarter as retail and trading of pre-owned jewellery and gold declined, but the company managed to cut cost of sales even more, by 24.3 per cent to S$61.7 million. That raised gross profit margin to 10 per cent from a year-ago 7 per cent, yielding a gross profit increase of 12.5 per cent to S$6.9 million.
ValueMax expects a "challenging" business environment as interest rates rise and gold prices remain lacklustre. The company plans to open two more pawnshops and retail outlets in Singapore in the next few months.
ValueMax shares did not trade on Wednesday, but were last bid at 24 Singapore cents and offered at 27 Singapore cents.