Valuemax

Valuemax - Latest news was last week where ValueMax’s FY13 net profit slumped 36% to $9.2m, in tandem with a 31% drop in revenue to $353.1m. The lacklustre performance was due to 32% decline in revenue from the retail and trading of pre-owned jewellery and gold business, and an 8% 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 improved revenue mix from the pawnbroking business, and a doubling of other operating income to $2.6m boosted by income from assignment of tenancy agreement, and fair value gains. This was however offset by a six-fold rise in other operating expenses to $4.1m, due to allowances made for doubtful trade receivables and write-down of inventories, and a 26% jump in admin expenses to $12.3m, led by a rise in employee benefits and rental expenses. Management notes that the industry as a whole is facing challenging business conditions, weighed by lower gold prices and increased competition within Singapore. Nevertheless, the group intends to continue with its strategy to grow the businesses in both S’pore and Malaysia. At the current price, ValueMax trades at 1.65x P/B versus closest peers Maxi-Cash’s 2.6x and MoneyMax’s 2.4x.