ValueMax

ValueMax’s FY13 net profit slumped 35.8% to $9.2m, in tandem with a 31% drop in revenue to $353.1m. The lacklustre performance was dragged by a 31.6% decline in revenue from the retail and trading of pre-owned jewellery and gold business, and an 8.1% drop in revenue from the pawnbroking business as a result of the decline in gold prices. Bottom-line was partly aided by a 1.3 ppt rise in gross margins to 6.4% on back of a higher revenue mix from the pawnbroking business, and a 112.7% rise in other operating income to $2.6m due to income from assignment of tenancy agreement, and fair value gains on consideration paid for interest in a subsidiary and measurement gains of investment in its associate. This was however offset by a 525.5% rise in other operating expenses to $4.1m due to allowances made for doubtful trade receivables and write-down of inventories, and a 25.7% jump in admin expenses to $12.3m led by a rise in employee benefits and rental expenses. Going forward, the group notes that the industry as a whole is facing challenging business conditions, weighed by lower gold prices and increased competition within the Singapore. Nonetheless, aims to continue with its strategy to grow its businesses both in Singapore and Malaysia. Fundamentals for the group remain strong with a relatively low net gearing at 0.19x. At current price, ValueMax trades at 1.65x P/B versus closest peers Maxi-Cash’s 2.6x and MoneyMax’s 2.4x. ValueMax has declared a first and final dividend of 0.88¢ per share for FY13 (no dividend declared in FY12)