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Sheng Siong Group reports S$27.3 million net profit for FY2011

Posted on 24th Feb 2012 @ 4:52 PM

Singapore, 23 February 2012 – Sheng Siong Group Ltd. ("Sheng Siong", and together with its subsidiaries, the "Group"), one of the largest supermarket chains in Singapore, reported a net profit of S$27.3 million on sales of S$578.4 million for the 12 months ended 31 December 2011 ("FY2011"). The Board of Directors has recommended a cash dividend of 1.77 cents per share, amounting to a payout ratio of around 90%.

fy2011-fs-table.jpg

Revenue dipped 8.0% yoy (“year-on-year”) to S$578.4 million, due to the closure of Ten Mile Junction (25,000 sq. ft.) in November 2010 and Tanjong Katong (16,949 sq. ft.) in September 2011 as both buildings were sold for re-development. However, the Group added four new outlets – Elias Mall in January 2011, Teck Whye in May 2011 and Woodlands Industrial Park and Thomson Imperial Court in November 2011. The Group ended the year with 25 outlets, an increase of two outlets over the previous year and expanding retail area by 3.3% yoy to around 348,000 sq. ft..

Gross profit margin improved to 22.1%, from 21.8% for FY2011, as a result of lower purchasing costs arising from increased direct and bulk purchasing made possible by the move to the Mandai Link Distribution Centre, which was completed in May 2011 at a cost of S$65 million. Nevertheless, gross profit dipped 6.5% yoy to S$127.8 million, due to the lower revenue.

Net profit was down 36.1% yoy to S$27.3 million, due to a reduction in other income of S$12.7 million, one-off IPO expenses of S$1.8 million and higher income tax of S$0.9 million. The decline in other income was attributable to several one-off income including a S$9.6 million gain from the divestment of listed equities in 2010 prior to the Group’s listing in August 2011 and the loss of retail rental of S$1.5 million from the Ten Mile Junction outlet. Excluding one-off other income items and IPO expenses*, operating margin maintained at 6.2% in FY2011.

Business Outlook

Mr. Lim Hock Chee, Chief Executive Officer of Sheng Siong Group Ltd., commented, “We expect the retail market in Singapore to remain challenging, in view of the uncertain global economic outlook, limited population growth and continuing competition. However, we expect our FY2012 performance to be boosted by contribution from new outlets and a one-off gain of S$10.4 million from the sale of our Marsiling warehouse.”

The Group is in final negotiations for three new outlets which are expected to conclude by the end of 2QFY2012. Together with a small outlet which was recently secured, these new outlets will contribute an additional 33,500 sq. ft., or 10% of existing retail space. The small outlet is targeted to commence operations by 2QFY2011.

The Group sold the Marsiling warehouse on 20 January 2012 for S$15.0 million, resulting in a gain of S$10.4 million. The warehouse was no longer required after the Group moved its warehouse and logistics operations to the new and larger Mandai Link Distribution Centre. The divestment gain will be recognised in FY2012.

Print version (PDF - 219 KB)

FY 2011 Financial Statements (PDF - 173 KB)

FY 2011 Annual Report (PDF - 1.72 MB)