Sitra

Sitra: The furniture distributor reported its FY14 results, which was boosted by fair value gain and one-time disposal gains on property.

For the year, Sitra's revenue grew 24% to $17m on better sales of wood-based products (+28%), but partially mitigated by a 38% decline in outdoor furniture products.

Geographically, sales from Europe and Australia/ New Zealand improved 34% and 25% to $8.6m and $7.1m, respectively, while Asia/Others markets recorded a 19% drop in revenue to $1.3m.

Gross margin contracted 1.7 ppts to 8.9%, mainly weighed by lower profitability of wood-based products.

But bottom line turned around from a net loss of $6.2m in FY13 to a net profit of $13.2m, of which $10m was contributed by fair value gains for its 10% investment in World Furnishing Hub, $6.1m was from the disposal of its property at 18 Sungei Kadut, and $2.3m from the divestment of its 82% stake in Sitra Dove Construction & Logistics. Stripping out the one-off items, the group remained in the red.

As Sitra has pared down its stake in non-performing overseas subsidiaries in FY14, fixed operating costs are expected to be lowered going forward, as the group regains its focus on its main core furniture distribution business.

However, there are headwinds for its furniture business, given the tepid global growth forecasts, which may have a negative impact on consumer spending.

Following its recent rights issue, balance sheet is currently debt free.

With a market cap at $12.8m, Sitra is valued at 0.9x P/B.