Creative Technology

Creative Technology: Creative posted a 4QFY14 net off of US$3.4m, versus a net loss of US$6.5m the previous year, taking FY14 net loss to US$21.7m versus a net profit of US$16.7m. The net profit from the previous year was largely due to other income gains of $28.2m, fuelled by a one-time licensing income and gain on divestment of a subsidiary company, barring which FY13 would have also been in the red. Revenue for the quarter was down 23.7% due to the uncertain and difficult market conditions which continued to affect the sales of the Group’s products and impacted sales across the group’s three geographical regions of Asia-Pacific, America and Europe. On its prospects, the group highlighted that it had introduced a number of new and exciting products during the year, particularly the Sound Blaster Roar, a high performance wireless portable speaker, which has seen positive reception. The successful launch of the Sound Blaster Roar is expected to provide good potential revenue growth opportunities in FY15, and with the Sound Blaster Roar beginning to contribute to revenue in the current quarter, Creative expects an improvement in revenue from the current levels and to report a lower operating loss. At the current price, Creative trades at ~0.93x P/B. The group has proposed a dividend of $0.05, taking its full year pay-out to $0.15, which represents a yield of 6.7%.