Sheng Siong’s profit catapults by 23.1% to $13.6m in 2Q

Reaping time has come for its new stores.

Sheng Siong is ready to pop the champagne as its new stores contributed 4% to its profit growth despite flat sales from old, existing units. The group has now set its eyes on revamping these underperforming stores to further boost sales.

“In addition to the range of initiatives such as bulk handling, favourable factors like the depreciation of SGD against MYR has allowed the group to push for lower input prices, resulting in a 0.5ppt QoQ rise in gross margin to 25.2%,” a report by OCBC said.

The growth also bucked a quarter of higher administrative expenses due to raised staff costs.

“Administrative expenses were a tad higher at 16.8% of sales, mainly due to higher staff costs by S$1.2m. But the 18.6% rise in operating profit was helped by rental income received and government grants,” the report said.

“One initiative is the renovation of old stores in matured housing estates that have seen a declining sales growth, whereby one store is already scheduled for renovation in 2H15,” the report added.