Courts Asia profits decline 28% in 1Q15

Expansion has its temporary costs.

Southeast Asian retailer Courts Asia has been reeling from higher distribution, administrative and marketing expenses as it expands its footprint and operations in the region, with higher other income and lower income tax expense cushioning the fall.

Net profit declined 27.9% to $5.1 million, as the 1Q15’s reported sales marginally declined 1.5% to $194.1 million from the previous year’s quarter.

Sales in Malaysia rose 8.2% in 1Q15, contributing approximately 33.7% to the Group’s sales. The new stores opened by the Group in the second half of FY14 contributed to the growth.

Courts Asia’s Executive Director and Group Chief Executive Officer, Mr. Terence Donald O’Connor said, “Given the challenging retail market, we expect Singapore’s performance to remain lacklustre in the short term. Apart from cost efficiency initiatives, we have been actively working on margin enhancing initiatives. At the same time, we are making good progress in transforming ourselves into a full-fledged omni-channel retailer to increase the touch-points with our customers and enhance the consumers’ shopping experience.”

As at June 30, 2014, the Group maintained a strong balance sheet with cash and bank balances totalling S$101.2 million.