Electrical, IT and furniture retailer Courts Asia reports 24.4 per cent growth in net profit to S$5 million (US$3.5 million) for the third quarter to December 31.
This is despite revenue falling 8.6 per cent year-on-year to $187.2 million, attributed to lower corporate sales for digital products, coupled with the recall of the Samsung Note 7 smartphone.
Courts Asia executive director/group CEO Terry O’Connor says the growth in profitability despite a lacklustre retail environment underscores the sustainability of the company’s cost-savings initiatives and productivity measures.
“We were also able to achieve better gross profit margin of 33.1 per cent, compared to 29.7 per cent for the previous third quarter.”
He says Singapore will lead the way for the group’s vision to be a regional omnichannel player by investing in the continuous improvement and innovation of its stores, both offline and online. “We will use Singapore’s e-store as the benchmark for improving the front-end experience and back-end capabilities for our Indonesia and Malaysia online stores.”
Singapore revenue, which made up 66.8 per cent of Courts Asia’s top line in the quarter, slid 12.3 per cent. Revenue in Malaysia, which contributes 29.3 per cent of the group’s turnover, fell 5.9 per cent, while in Indonesia, still a relatively new market, there was a 104.3 per cent jump in revenue mainly because of new stores. O’Connor says Indonesia represents an “insignificant portion” of the group’s overall revenue at just 3.9 per cent.
Group gross profit margins increased marginally to 33.1 per cent from 29.7 per cent the previous third quarter.
Meanwhile, O’Connor says Courts Asia is seeking to achieve the right store portfolio balance in terms of number of locations or store format. In Malaysia, the company expects to increase its store base from 67 to 70 by the end of this financial year, while in Indonesia one store opened during the quarter, with its ninth outlet on track to open this year.