Courts Asia reveals its amazing 45% profit surge shortly after its SGX listing

Its stores in Bukit Timah and Clementi bolstered sales growth.

According to a release, Courts Asia Limited delivered strong financial performance in its maiden quarterly results report, less than a month after its October 15 trading debut on the Mainboard of the Singapore Exchange Securities Trading Limited.

Net profit surged 45.5% to S$15.9 million for the three months ended September 30, 2012 (“2Q 2013”), compared to S$10.9 million in the last corresponding period (“2Q 2012”).

This was achieved on the back of year-on-year sales growth of 12.7%, which increased from S$191.4 million in 2Q 2012 to S$215.8 million in 2Q 2013.

In tandem with higher Group revenue, gross profit in 2Q 2013 increased by 18.7% to S$73.3 million. The gross profit margin rose from 32.3% to 34.0%, driven by higher earned service charge from credit sales and higher net merchandise gross profit.  

Courts Asia’s Executive Director and Chief Executive Officer, Mr Terence Donald O’Connor, said:

“We are pleased to deliver a strong set of results so soon after our SGX-ST listing. The opening of two new stores in Bukit Timah and Clementi in Singapore bolstered our sales growth. We also saw a significant increase in digital products in Malaysia, which came mainly from the sales of tablets and smartphones, namely Samsung and Apple. This was in part because we were able to capitalise on the competitive position we secured this March as Apple’s Tier 1 dealer in Malaysia.

“Our unique business model that encompasses in-house credit facilities, have led to higher margin this quarter. This differentiates us from other industry players and provides business resilience. In addition, our strategy of improving store performance and productivity has yielded good results.”

For the six months ended September 30, 2012, (“1H 2013”), sales increased 13.0%, from S$362.4 million in the past corresponding period (“1H 2012”) to S$409.7 million. Gross profit increased 13.6%, with margin remaining at a healthy level of about 32%.

Net profit rose from S$18.7 million in 1H 2012 to S$22.6 million in 1H 2013, representing a 21% increase.

The balance sheet remained healthy with a strong cash and cash equivalentsposition of S$46.4 million as at September 30, 2012, despite a decrease from S$59.2 million as at March 31, 2012.

The decrease was mainly due to capital expenditure incurred by new stores and a dividend payment of S$8.6 million during the period. But this was partially offset by higher operating profit for the period and net proceeds from borrowings of S$9.6 million.