Monday, January 27, 2014

Grand Banks Yachts

Grand Banks Yachts: swung to a net profit of $0.3m in 2QFY14 - its first quarterly profit in four years - reversing from a net loss of $0.8m a year ago, driven by efforts to improve sales and efficiency, along with the recovery in the US luxury boat market. Revenue rose 42% to $9.5m, while operating expenses declined 29% to $1.7m, mainly due to reduced headcount and recovery of doubtful debts and forfeiture of deposit. However, orders arising from the international boat show last Nov have been slower than anticipated, resulting in the group’s net order book declining to $9m as at end ’13, vs $16.8m from a year ago. Earlier this wk, a subsidiary of the group was also served a writ of summons from a customer seeking claims for a yacht purchased. The company has sought legal advice and will update accordingly on the potential financial impact, if any. The group will continue to participate in boat shows in the next few months in San Diego, Seattle, Miami and Palm Beach in the US as well as in S’pore, and further its efforts to streamline operations. The group remains on the lookout for investment opportunities to widen its market reach and broaden revenue streams. As Grand Banks remains on the SGX Watch-list, it will be assessed on its FY14 results to determine whether it meets the requirements for removal from the list or the counter facing delisting. At $0.22, the counter trades at 0.8x P/B, 32.4x annualized 2QFY14 P/E.

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