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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.

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ValueMax shares did not trade on Wednesday, but were last bid at 24 Singapore cents and offered at 27 Singapore cents.

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