Posted on 11th Nov 2011 @ 11:08 AM

Sheng Siong Group sustains operating performance for 9MFY2011.

• Operating profit excluding other income up 4.2% yoy to S$26.6 million for 9MFY011
• Gross profit margin improved to 23.0%, from 21.2% for 9MFY2010, due to a better sales mix, lower purchasing costs and more bulk purchasing rebates
• Group expects revenue to improve with 2 new stores scheduled to open by end of 2011

Singapore, November 10, 2011 . Sheng Siong Group Ltd. (“Sheng Siong”, and together with its subsidiaries, the “Group”), one of the largest retailers in Singapore, reported a net profit of S$23.5 million for the nine months ended 30 September 2011 (“9MFY2011”), down 33.6% year-on-year (“yoy”). The decline in profits was primarily due to an absence of investment gains for the period. Operating profit excluding other income improved 4.2% yoy to S$26.6 million, from S$25.5 million for 9MFY2010.

Revenue slipped 8.5% yoy to S$439.6 million for 9MFY2011, due to the closure of two outlets – Ten Mile Junction in November 2010 and Tanjong Katong in September 2011. Both outlets were closed as the buildings they occupied were sold for re-development. On the other hand, the Group opened two new, but smaller, outlets – Elias Mall in January 2011 and Teck Whye in May 2011 and is scheduled to open another two in Woodlands Industrial Park and Thomson Imperial Court by the end of the year. As a result, the Group will have 25 outlets with a total retail space of approximately 348,000 sq. ft. by the end of 2011, from 22 at the end of 2010.

Gross profit margin improved to 23.0%, from 21.2% for 9MFY2010, due to better sales mix, lower purchasing costs and more bulk purchasing rebates. The Group improved its sales mix by shifting to more higher-margin fresh produce. It also utilised the newly-completed Mandai Link Distribution Centre to engage in direct sourcing and bulk purchasing of goods.

Other income declined 83.4% yoy to S$2.4 million, primarily due to an absence of investment gains amounting to S$9.4 million for 9MFY2010. The Group divested its entire holdings of quoted investments by 31 December 2010 to prepare for its initial public offering in August 2011.

The Group maintained a strong balance sheet with net cash of S$121.4 million as at 30 September 2011.

Business Outlook

Mr. Lim Hock Chee, Chief Executive Officer of Sheng Siong Group Ltd., commented, “We will continue to focus on revenue and margin expansion to drive growth. We target to open more stores to boost the top-line. The Woodlands and Upper Thomson outlets, scheduled to open by the end of 2011, will contribute positively to our revenue for FY2012. The completion of the Mandai Link Distribution Centre in May 2011 has given us the much-needed warehousing capacity to engage in more gross margin enhancing initiatives like direct sourcing and bulk purchasing of goods, as well as to expand our range of house-brand products.”

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Third Quarter 2011 Financial Statement (PDF - 164 KB) is available by clicking here.