COURTS ASIA LIMITED Results Briefing l 15 February 2013 l Results for the 3rd quarter ended 31 December 2012

Transcription

1 COURTS ASIA LIMITED Results Briefing 15 February 2013 Results for the 3rd quarter ended 31 December 2012

2 Executive summary Financial highlights Operational updates 2

3 Executive summary 1 Net profit increased 21.6% for Q3 FY12/13 and 21.1% for YTD December 2012 compared to last year s corresponding periods 2 Sales up 9.4%, boosted by the opening of new stores and increased sales of tablets and smartphones 3 Gross profit up 6% on the back of higher sales 4 Healthy balance sheet with strong cash position of S$84.2 million as at 31 December Outlook: Two upcoming stores in Singapore; one new store in Malaysia scheduled for opening in Q4 FY12/13 3

4 Executive summary Financial highlights Operational updates 4

5 Financial summary and key financial ratios (S$m unless otherwise stated) Income statement Q3 FY12/13 Q3 FY11/12 YTD Dec 2012 YTD Dec 2011 Sales Gross profit Basic EPS (cents) Diluted EPS (cents) Balance sheet As at 31 December 2012 As at 31 March 2012 Cash and bank balances Trade and other receivables Borrowings NAV per ordinary share (cents) Statement of cash flows Q3 FY12/13 Q3 FY11/12 YTD Dec 2012 YTD Dec 2011 Net cash (used in)/provided from operating activities (10.4) 7.4 (9.7) (3.2) Net cash used in investing activities (2.7) (1.3) (9.4) (4.9) Net cash provided from/(used in) financing activities 49.1 (6.9) 44.5 (10.8) Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December 5

6 Total sales Total sales and EBIT margin Total sales (S$m) EBIT margin (%) 4.3% 6.0% 8.6% 7.8% 8.0% Net sales by geography Sale of goods cash/credit mix S$m Group 27.0% 24.3% 22.7% 23.8% 22.1% % 75.7% 77.3% 76.2% 77.9% Malaysia Singapore Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December Sale of goods - credit Sale of goods - cash 6

7 Product range focused on 4 key segments % of YTD Dec 2012 sale of goods Electrical Products Major White Goods Vision Small appliances Audio IT Products Computers Accessories Photography Mobile Furniture Mattresses Bedroom furniture Dining room furniture Living room furniture Home office products Services 41.8% 35.1% 18.3% 4.8% Warranty sales Other services Product replacement services Sale of goods cash/credit mix Singapore Sale of goods cash/credit mix Malaysia 13.7% 10.0% 9.2% 9.5% 10.5% 65.7% 64.8% 61.9% 63.9% 57.1% 86.3% 90.0% 90.8% 90.5% 89.5% 34.3% 35.2% 38.1% 36.1% 42.9% Sale of goods - credit Sale of goods - cash Sale of goods - credit Sale of goods - cash Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December 7

8 Operating metrics Sales per sq. ft. 1 Like-for-like sales growth 2 Gross profit S$ Singapore Singapore , % 31.2% 32.1% 31.5% 31.3% 5.7% 8.3% 30.4% FY Mar 2010 FY Mar 2011 FY Mar 2012 YTD Dec 2011 YTD Dec 2012 FY Mar 2011 FY Mar 2012 YTD Dec MYR Malaysia Malaysia % FY Mar 2010 FY Mar 2011 FY Mar 2012 YTD Dec 2011 YTD Dec % 6.7% FY Mar 2011 FY Mar 2012 YTD Dec 2012 FY Mar 2010 FY Mar 2011 FY Mar 2012 Gross profit (S$m) YTD Dec 2011 YTD Dec 2012 Gross profit margin (%) Notes: 1: Based on weighted average retail square footage and sale of goods from stores for each period, excluding sales from events held outside stores 2: Like-for-like sales (net merchandise sales) growth for a financial year is calculated based on stores which had been operating for the entire 12 months over that particular year and the entire 12 months over the preceding year. Like-for-like sales (net merchandise sales) growth for a 9-month financial period is calculated based on stores which had been operating for the entire 9 months over that particular period and the entire 9 months over the preceding period. 8

9 Earned service charge income 18.3% % 16.5% 15.9% 17.2% Malaysia (S$m) Singapore (S$m) % of net sales Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December 9

10 Breakdown of expenses and EBITDA Breakdown of expenses S$m Others Salaries and wages Distribution and marketing Impairment loss on trade receivables Rental on operating leases EBITDA 2 5.4% % % 8.4% 8.8% EBITDA (S$m) EBITDA margin (%) Notes: 1: Others include depreciation, amortisation, finance and other expenses 2: EBITDA calculated as profit before tax add finance expense and depreciation and amortisation expense FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December 10

11 Jun 07 Sep 07 Dec 07 Mar 08 Jun 08 Sep 08 Dec 08 Mar 09 Jun 09 Sep 09 Dec 09 Mar 10 Jun 10 Sep 10 Dec 10 Mar 11 Jun 11 Sep 11 Dec 11 Mar 12 Jun 12 Sep 12 Dec 12 Delinquency rates and impairment loss 180+ days delinquency rates 16.2% 4.9% 7.6% -8.6% 2.7% -2.2% Singapore Malaysia Impairment loss on trade receivables as a percentage of average portfolio 7.6% 6.1% 5.1% 4.4% 4.2% Significant reversal of over-impairment allowance of trade receivables in FY Mar 2011 mainly due to: over-provision for impairment loss in previous years 3.1% 2.2% 3.0% 2.7% 2.1% 2.0% Singapore Malaysia Malaysia - normalised Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December improved credit monitoring and collections, resulting in improved credit risk position Net impairment allowance in FY Mar 2011 would have been larger by S$8m without an adjustment on the over-impairment allowance made in previous financial years This reversal of the over-impairment allowance of trade receivables in FY Mar 2011 is a non-recurring event 11

12 Allowance for impairment loss on trade receivables Singapore Malaysia 3.4% 3.5% 10.5% 2.6% 2.8% 2.7% 6.8% 6.6% 6.6% 5.7% Allowance for impairment loss on trade receivables (S$m) % of trade receivables at balance sheet date Allowance for impairment loss on trade receivables (S$m) % of trade receivables at balance sheet date Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December 12

13 Working capital management Trade payable days Inventory days Days Days Notes: FY: Refers to the full-year period ended 31 March YTD: Refers to the 9-month period from 1 April to 31 December 13

14 Executive summary Financial highlights Operational updates 14

15 Successful re-launch of Courts Megastore in December 2012 Innovative retail concept at newly renovated Megastore Courts Connect, 1 st ever in Singapore Featuring services from all major telecommunications providers under one roof High tech retail experience - Singapore s 1 st Augmented Reality 3D Sound Box - QR code scanning available for product info and mobile payment - Digital Kiosks installation, completing the multi-channel shopping experience Courts Connect Courts Solutions Bar New services launched to meet consumers needs 3D Sound Box Digital Kiosks 15

16 Record turnout at opening weekend at Courts Megastore 36 hr marathon sale saw over 40,000 people turned up G.NA, Korean celebrity and Ian Rush, Liverpool legend appearances drew footfall 16

17 ecourts: Singapore re-launch in October 2012; Malaysia new launch in January 2013 Singapore s online platform saw a triple digit surge in revenue since launch Malaysia launched online platform in January 2013 Instant approval for online credit limit applications to be introduced in March 17

18 Completed new store openings, refurbishments and relocations across SG and MY in FY Mar 2013 New stores opened Singapore Stores refurbished/relocated Malaysia Singapore: Star Vista store in Buona Vista opened in September 2012 Refurbished Lot One, Choa Chu Kang Causeway Point Woodlands Courts Megastore Refurbished Kuantan Kota Bharu Kuching Ipoh Shah Alam Kajang Relocated Kulai Kota Tinggi Malaysia: 5 new stores opened Jerteh in January 2013 Aeon Ipoh in August 2012 Mentakab Star Mall in November 2012 Setia City Mall in May 2012 Kip Home Mart in April

19 Coming soon...store expansion across SG and MY Upcoming stores Singapore: 2 differentiated concept stores in the upcoming JEM and Westgate retail malls in Jurong Upcoming store refurbishments/relocations Singapore: 2 stores scheduled for refurbishment Ang Mo Kio JEM Toa Payoh Westgate Malaysia: 1 new store scheduled for opening in Q4 FY2013 Malaysia: 1 store scheduled for refurbishment Sungai Petani, Kedah Klang, Selangor 19

20 Other initiatives Indonesia expansion 1 st Indonesian located in Kota Harapan Indah, the biggest development area of Bekasi, eastern Jakarta. Close to 140,000 square feet, the two-storey Megastore will be the Group s largest store to date when it opens. Operational in FY Mar Cost-efficiency initiative Cost efficiency project to drive further efficiencies across the business. Key areas include optimising supply chain and enhancing marketing efficiency. 20

21 Appendix 21

22 Unaudited results for the 3rd quarter ended 31 December 2012 Group Q3 Q3 % FY12/13 FY11/12 Change S$'000 S$'000 Sales 195, , Cost of sales (137,705) (124,140) (10.9) Gross profit 57,831 54, Other income and other gains - net 3,449 1, Expenses - Distribution and marketing (16,320) (14,436) (13.1) - Administrative (33,052) (31,194) (6.0) - Finance (4,436) (4,266) (4.0) Profit before income tax 7,472 6, Income tax expense (1,307) (1,311) 0.3 Total profit 6,165 5, Singapore: Contributed 71% of the Group s sales, registered a 11.5% increase compared to Q3 FY11/12. Like-for-like sales increased by 4.9% as a result of continuing initiatives to grow sales through broad promotional activities and enhanced product ranges. Sales were boosted with the full nine-month operations of the Bukit Timah and Clementi stores which were opened in December 2011 and January 2012 respectively. The online Store and Megastore Re-launches, in October 2012 and December 2012 respectively, alongside with the Star Vista store which commenced in September 2012 also contributed to higher sales. Malaysia: Contributed 29% of the Group s sales, registered a 4.6% (6.6% in RM term) increase as compared to Q3 FY11/12. Like-for-like sales increased by 11.3% (in RM terms) and the increase came mainly from digital products due to incremental sales of tablets and smartphones. The increase in sales was also due to the opening of new stores, partially offset by the closure of 2 under-performing Kuala Lumpur stores in prior year. Gross profit increased 6.0% on the back of higher sales. The gross profit margin decreased marginally from last quarter s 30.5% to 29.6% mainly due to a shift in sales mix towards the digital category which carries a lower gross profit margin. Other income and other gains - net increased 97.9% mainly due to write back of impairment on overdue debtors, partially offset by a gain on disposal of property in Malaysia in Q3 FY11/12. There was no such one off disposal in Q3 FY12/13. Distribution and marketing expenses increased mainly due to a heavier promotional spending to support the Singapore Megastore Re-launch in December Administrative expenses increased as a result of higher occupancy costs mainly due to the opening of new stores in Singapore and Malaysia. Finance expenses increased mainly due to higher interest expenses and borrowing costs arising from higher borrowing from the Syndicated Senior Loan by CMB. This was partially offset by a lower loss on foreign exchange in CSL compared to Q3 FY11/12. 22

23 Unaudited Balance Sheet as at 31 December 2012 Group 31 Dec Mar 2012 S$'000 S$'000 ASSETS Current assets Cash and bank balances 84,220 59,174 Trade and other receivables 212, ,522 Inventories 73,016 66, , ,307 Non-current assets Derivative financial instruments Trade and other receivables 232, ,504 Investment in subsidiaries - - Property, plant and equipment 21,399 16,293 Intangible assets 23,436 23,149 Deferred income tax assets 5,285 4, , ,939 Cash and bank balances increased mainly due to proceeds from the issue of shares of $43.5 million and net proceeds from borrowings of $27.3 million. This was partially offset by an increase in net cash used in working capital mainly due to financing of receivables as a result of higher credit sales, payment to trade payables, capital expenditure incurred for new stores of $11.9 million and dividend payment of $12.6 million during the nine months ended 31 December Trade and other receivables (current and non-current) increased mainly a result of higher credit sales in Singapore. Inventories increased due to the opening of new stores in Singapore and Malaysia. Total assets 652, ,246 LIABILITIES Current liabilities Trade and other payables 133, ,526 Current income tax liabilities 4,492 4,796 Borrowings 5,525 66,499 Deferred income 3,313 3, , ,028 Non-current liabilities Derivative financial instruments Trade and other payables Borrowings 224, ,695 Deferred income 4,000 4,575 Deferred income tax liabilities 1, , ,939 Total liabilities 376, ,967 NET ASSETS 275, ,279 EQUITY Share capital 264, ,129 Other reserves (11,052) (7,659) Retained profit 21,994 5,809 Total equity 275, ,279 Property, plant and equipment increased mainly due to additions for new stores in both Singapore and Malaysia such as renovations and fittings, partially offset by depreciation charge. Intangible assets increased mainly due to development costs incurred for the online store and introduction of ipad as a selling tool for sales staff in Singapore, partially offset by normal depreciation of existing assets. Trade and other payables decreased mainly a result of the bonus payout for 2012 in Singapore, partially offset by higher trade payables in both countries. Borrowings increased mainly due to proceeds from the renewal of the Asset Securitisation programme and HSBC term loan of $33.9 million and $15.0 million respectively in Singapore and $6.0 million proceeds from the Syndicated Senior Loan in Malaysia. This was partially offset by full repayment of a term loan of $28.9 million in Singapore. 23

24 Unaudited Statement of Cashflows for the 3rd quarter ended 31 December 2012 Group Group Q3 Q3 YTD Dec 12 YTD Dec 11 FY12/13 FY11/12 FY12/13 FY11/12 S$'000 S$'000 S$'000 S$'000 Cash flows from operating activities: Total profit 6,165 5,071 28,766 23,751 Adjustments for: Tax expense 1,307 1,311 6,755 5,579 Depreciation and amortisation 2,585 2,313 7,145 6,136 Amortisation of deferred income (728) (661) (2,498) (1,817) Interest expense 4,074 3,069 11,790 8,815 Interest income (2,537) (559) (3,632) (1,700) Amortisation of borrowing costs ,360 1,448 Loss/(gain) on disposal of property, plant and equipment net of deferred 1 (1,129) 15 (1,129) Changes in fair value of derivative financial instruments (197) Share-based compensation Foreign currency translation differences (37) 2,520 (3,235) (1,242) Operating cash flow before working capital changes 10,954 12,847 46,982 40,403 Changes in working capital Inventories (605) (4,986) (6,405) (5,955) Trade and other receivables (5,322) (3,867) (43,644) (33,939) Trade and other payables (11,837) 6, ,079 Cash (used in)/ provided from operations (6,810) 10,314 (2,119) 3,588 Tax paid (2,183) (2,950) (6,184) (6,747) Net cash (used in)/provided from operating activities (8,993) 7,364 (8,303) (3,159) Cash flows from investing activities Additions to property, plant and equipment (4,665) (3,098) (11,880) (7,259) Additions to intangible assets (470) (28) (1,105) (580) Proceeds from sale of property, plant and equipment (98) 1,250 (84) 1,220 Interest received 1, ,257 1,700 Net cash used in investing activities (4,071) (1,317) (10,812) (4,919) Cash flows from financing activities (Repayment of)/proceeds from syndicated facilities - (320) - 12,678 Proceeds from syndicated senior loan 2,311-5,967 - Additions in finance lease liabilities Proceeds from term loan 15,000-15,000 - Repayment of term loan - (2,590) (28,940) (5,940) (Repayment of)/proceeds from loan received on asset securitisation (717) 3,266 33,903 (1,447) Increase in fixed deposits pledged as securities for banking facilities (1,701) (1,991) (88) (3,793) (Increase)/decrease in deposits for asset securitisation (1,436) (612) (1,021) 384 Proceeds from issue of shares pursuant to listing 43,503-43,503 - Interest expense paid (4,074) (3,069) (11,790) (8,815) Dividend paid (4,000) (1,632) (12,581) (3,998) Net cash provided from/(used in) financing activities 49,148 (6,884) 44,526 (10,825) Net increase/(decrease) in cash and cash equivalents 36,084 (837) 25,411 (18,903) Cash and cash equivalents as at beginning of the period 37,854 32,556 48,973 50,528 Effect of currency translation on cash and cash equivalents (7) (2) (453) 92 Cash and cash equivalents as at end of the period 73,931 31,717 73,931 31,717 The cash and cash equivalents comprise the following:- 31 Dec Dec 2011 S$'000 S$'000 Cash and bank balances 78,310 24,240 Fixed deposits 5,910 18,600 84,220 42,840 Less: Fixed deposits pledged as securities for banking facilities (10,289) (11,123) Cash and cash equivalents per consolidated statement of cash flows 73,931 31,717 24

25 Q&A To view the results presentation and briefing, please visit which will be available from February 21,