Courts’ annual net profit rises 16.8% to S$20.3 million

SINGAPORE - Mainboard-listed electrical, IT and furniture retailer Courts Asia reported a 16.8 per cent growth in annual net profit on Thursday (May 26) — despite the lacklustre retail landscape — boosted by its efforts to cut costs and drive productivity.

For the fiscal year ended March 31, net profit rose to S$20.3 million from S$17.4 million a year earlier as revenue inched up 1.6 per cent to S$770.4 million, Courts said after the stock market closed. It proposed a one-tier tax-exempt final dividend of 1.29 cents per ordinary share, representing a payout ratio of about 33.3 per cent of fiscal-year net profit after tax.

Courts’ Executive Director and Group Chief Executive Officer, Dr Terence Donald O’Connor, said: “The cost savings initiatives that we have put in place have continued to yield positive results, putting us in a strong position as we enter the new financial year in 2016. With the prudent management of all cost lines, including finance, we expect to reduce interest expenses significantly.”

“Apart from keeping a close watch on costs, the focus on store productivity of our Megastores remains high on our agenda. In Indonesia, we have recently secured an anchor tenant, Super Indo, one of the leading supermarket groups in the country, which occupies 14,000 square feet in Courts Megastore, Kota Harapan Indah, Bekasi. In Malaysia, Decathlon, one of the world’s largest sports retailers, will be opening its first 27,000 square feet retail store at Sri Damansara Courts Megastore by end-May. Work is also underway to review the store productivity of the other Megastores,” he added.

For the fiscal fourth quarter, Courts reported net profit fell 36.2 per cent to S$4.2 million as revenue decreased by 6 per cent to S$181.3 million.

While the macroeconomic environment in Singapore, which accounts for nearly two-thirds of Courts’ overall turnover, remains soft in the short term, Courts said it anticipates demand for household appliances and furniture to sustain over the medium term.

It noted that the Housing and Development Board plans to launch a total 18,000 Build-To-Order flats for 2016, and added that the resale markets for public and private non-landed housing have also been encouraging. The volume of HDB resale flats and private home sales increased 10.3 and 17.6 per cent, respectively, in April from March, it noted.

Before the results announcement, Courts shares rose 3.1 per cent to close at S$0.335 yesterday, outperforming the 0.2 per cent uptick in the benchmark Straits Times Index.