Sheng Siong: Reported FY11 results which were slightly below average estimates. Rev at $578.4m, -8% yoy and net profit at $27.3m, -36.1% yoy. Gross margins improved slightly at 22.1% vs 21.8% yoy. Co. has recommended a cash div of 1.77c/share, representing a payout ratio of 90% and a yield of 3.6%.
Drop in YoY Rev due to closure of Ten Mile Junction (25,000 sqf) in Nov10 and Tanjong Katong (16,949 sqf) in Sept11 as both buildings were sold for re-development. Grp added four new outlets – Elias Mall in Jan11, Teck Whye in May11 and Woodlands Industrial Park and Thomson Imperial Court in Nov11 and ended yr with 25 outlets, an increase of two outlets over previous yr and expanding retail area by 3.3% YoY to ard 348,000 sqft.
Net profit down due to a reduction in other income of $12.7m, one-off IPO expenses of $1.8m and higher income tax of S$0.9m. The decline in other income was attributable to several one-off income including a S$9.6m gain from the divestment of listed equities in 2010 prior to the Group’s listing and the loss of retail rental of $1.5m from the Ten Mile Junction outlet.
Going forward, grp expect the retail market in Singapore to remain challenging, in view of the uncertain global economic outlook, limited population growth and continuing competition. However, expect FY2012 performance to be boosted by contribution from new outlets and a one-off gain of $10.4m from the sale of grp’s Marsiling warehouse.
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