Second Chance Properties

Second Chance Properties saw FY14 net profit down 71.1% to $16.5m on revenue of $48.5m (-10.1%), as bottom-line saw the absence of once-off fair value gains. The fall in revenue was largely weighed by a drop in sales from the apparel and gold business segments. Revenue from the apparel segment fell 10.5% to $19.0m, weighed by the closer of some outlets during the year, while gold segment revenue fell 19.7% to $15.2m due to a high base in FY13 which had seen sales surged during the Apr – May ’13 period, on widespread news then that gold prices had sunk to its lowest level. Bottom-line saw the absence of fair value gains of investment properties, which was at $42.9m for FY14 versus $0.3m in the current year. Stripping off fair value gains, profit before income tax would be at $16.3m (-1.0%). Going forward, Second Chance guides that with uncertainty in the global economy, there is now a heightened risk of a worldwide slowdown which will affect the economies of Singapore & Malaysia, although the group still expects the gold and apparel business to remain profitable. The group is of the view that downward pressure on retail rentals, due to the tightening of foreign workers policies, could weigh on its property segment performance, while the performance of its securities division over the next 12 months will be highly dependent on market forces. At the current price, Second Chance Properties trades at 1.17x P/B.