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Tag: Courts Asia

  • Courts Asia continues negative trend as Malaysian sales tank

    Courts Asia continues negative trend as Malaysian sales tank

    Takeover target Courts Asia had a forgettable third quarter, reporting a net loss of S$171,000 – a stark contrast to the $3.51 million profit for the same period a year earlier. The company blamed lower sales and gross-profit margins together with higher income tax expenses.

    Group sales fell 6.2 per cent to $175.3 million, largely due to a 22.2 per cent decline in Malaysian sales measured in ringgit with lower consumer demand for goods and services.  Singapore sales, which account for three-quarters of the business’ overall sales, slipped a negligible 0.7 per cent, while the company’s Indonesian woes continued. Although the market accounts for just 3.4 per cent of Courts Asia’s sales, revenue fell 7.3 per cent in local currency. Courts Asia is already taking steps to stem losses in Indonesia, recently announcing the closure of one of its megastores and the downsizing of another.

    Japanese electronics retailer Nojima Corp lodged a takeover bid for Courts Asia last month, conditional only on the formal acceptance by Courts Asia’s majority shareholder  Singapore Retail Group, which has already indicated its acceptance. The Japanese company plans a strategic review of the business and will consider delisting it.

    Meanwhile, Courts Asia says it will continue to endeavour to improve efficiencies in its Malaysian business to improve productivity and return to profit. Twelve underperforming stores have already been closed reducing the network to 54.

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  • Courts Asia gets buy offer from Japan retailer Nojima

    Courts Asia gets buy offer from Japan retailer Nojima

    Japanese electronics retailer Nojima Corp has launched a conditional takeover bid for Courts Asia. The deal is conditional upon Courts Asia’s majority owner Singapore Retail Group (SRG) agreeing to the deal. Offering 20.5 cents a share for the business, the offer represents a 35 per cent premium over the price shares were trading at before the bid was revealed.

    Nojima is listed on the Tokyo Stock Exchange. Like, Courts Asia, it is an electrical appliance retailer, boasting more than 8000 employees and a market capitalisation of S$1.4 billion. Sales in the year to March 31 last year were $6.1 billion.

    Courts Asia has 80 stores trading in Singapore, Malaysia and Indonesia and besides electronics sells furniture and IT products as well. The company has enjoyed mixed fortunes in recent years, impacted by external factors such as the imposition of GST in Malaysia. It reported a net loss of $3.1 million in its second quarter, a stark contrast to the net profit of $1.5 million during the same period a year earlier. Sales for the three months to September 30 fell 6.4 per cent to $165.1 million.

    Nojima says if it wins control of the company it may carry out a “strategic and operational review” of the business to realise “synergies, economies of scale, cost efficiencies and growth potential”. It will most likely delist the company in Singapore.

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  • Courts Asia shows negative number after Malaysian woes

    Courts Asia shows negative number after Malaysian woes

    Singaporean electronics and furniture retailer Courts Asia has posted a net loss of SG$3.1 million (US$2.25 million) in its second quarter.

    The result is a reversal of a net profit of $1.5 million (US$1.09 million) during the same period last year.

    Courts Asia said in a statement that Malaysia revenue came under pressure after the introduction of the Consumer Protection (Credit Sale) Regulations 2017 which saw consumer interest rates capped at 15 per cent per annum from January. However, ongoing transformation work with a persistent focus on cost and productivity efficiencies in Malaysia reaped results, with Malaysia’s PBT crossing into positive terrain after two consecutive quarters of loss.”

    Group CEO Terence Donald O’Connor said: “We are encouraged by the early signs of stabilisation in the Malaysia business. We have closed 10 underperforming stores since the start of our financial year in April and continue to review our store network performance. Impairment loss on trade receivables charged to the profit and loss statement has also been on a declining trend from the fourth quarter ended March.”

    The Singapore firm recorded $3.4 million profit before tax after starting out on its store transformation process, up from $3 million last year. It renovated its Ang Mo Kio outlet last month.

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  • Courts Malaysia hurts Asia performance

    Courts Malaysia hurts Asia performance

    Regulation changes in Malaysia dragged down both revenue and profits for Southeast Asian electrical, IT and furniture retailer Courts Asia.

    For the year to March 31, Courts Asia had a 3.7 per cent dip in revenue to SG$713.1 million (US$532.5 million). Profits slipped to $8.1 million from $23.7 million.

    Meanwhile, distribution and marketing expenses “remained relatively stable” at $56.5 million, or 7.9 per cent of revenue, the group says.

    Revenue from Malaysia, which contributed to 26.2 per cent of total turnover, slid 15.4 per cent on a year-on-year basis. This was mainly because of lower sales of goods and earned service charge income, says the group.

    Courts Asia executive director/group CEO Terence Donald O’Connor says the company faced headwinds in Malaysia following the introduction of the Consumer Protection (Credit Sale) Regulations 2017. This saw interest rates being capped at 15 per cent a year along with new compliance processes that led to a revenue drop.

    “The fall in revenue, coupled with an increased credit cost and a more prudent credit-sanctioning approach in Malaysia, affected our profitability,” says O’Connor.

    Taskforce

    As a result, Courts Asia has formed a transformation taskforce to look into business processes with the objective of driving productivity in Malaysia.

    Meanwhile, seven underperforming stores have been closed, ending with a footprint of 63 outlets. Other key actions taken in Malaysia include deploying a regional credit taskforce comprising executives with “specialised credit collections and marketing skill sets”.

    “While we agree that consumer sentiment has lifted with the changes sweeping through Malaysia, it will take time for it to filter through to discretionary spending,” says O’Connor. Initiatives such as zero rating GST from 6 per cent from today have been welcomed.

    In Singapore, Courts Asia’s performance remained strong at $25.2 million, the company says. Revenue from Singapore accounted for 69.9 per cent of the group’s top line, and increased 1.5 per cent. This was underscored by improved sales and follows an increased focus on driving an omni-channel approach with the relaunch of its online platform and the re-opening of Courts Megastore at Tampines in November.

    As part of its move toward offering furniture for the modern home, Courts Asia has refreshed its furniture range leading up to the Hari Raya festive season.

    For Indonesia, the group achieved 13.7 per cent growth in revenue in rupiah, thanks mainly to new stores. After “prudently widening its footprint”, Courts Asia now has 32 locations across the Jakarta region, including nine stores and 23 pop-ups.

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  • Fewer sales, but more profit for Courts Asia

    Fewer sales, but more profit for Courts Asia

    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.

  • Courts Asia continues to defy downtown

    Courts Asia continues to defy downtown

    Electronics and furnishings retailer Courts Asia has reported a modest 0.3 per cent increase in profits for the third quarter – against a background of a stagnant domestic market.

    The company’s sales grew a healthy 6.1 per cent – mostly due to increased sales of high value electronics such as iPads and smartphones. Total revenue was S$204.7 million; net profit $4 million.

    “In Singapore, the macro environment is very much against the consumer market at the moment,” CEO and executive director Dr Terry O’Connor said during a conference call briefing on the result.

    “The [Singapore] economy is going through some restructuring in terms of the residential property market, the total debt servicing ratio, the labour market and restrictions,” he said.

    However, O’Connor remains upbeat about the domestic market, predicting the “sluggish” current trading environment would eventually pass.

    Singapore, which accounts for nearly 70 per cent of Courts Asia’s sales, saw sales grow 7.9 per cent and in Malaysia sales rose 20 per cent. Indonesia, which now accounts for 1.7 per cent of Courts Asia’s sales, reported an increase of 6.1 per cent.

    The company’s gross margin fell by 2.4 percentage points to 29.7 per cent which O’Connor said was due to a shift in the sales mix towards electrical goods and a higher ratio of bulk sales which return smaller margins.

  • Courts opens second Indonesia megastore

    Courts opens second Indonesia megastore

    Courts Indonesia has opened its second megastore – inside BSD City, about 42 km west of Jakarta.

    The new store is part of a strategy by Singapore-listed Courts Asia to expand its footprint beyond its core Singapore and Malaysia markets.

    Billed as the largest Courts Megastore in Asia, the new outlet covers 22,694 sqm of land and boasts a shopping area of about 20,400 sqm.

    “Indonesia is currently the driver of Courts’ growth,” said Roy Santoso, Courts Retail Indonesia CEO in a statement.

    “Since we first entered Indonesia in 2014, we now operate two megastores and three regular outlets. We aim to open 12 more outlets by 2018. This is our commitment in catering to the demands of Indonesians,” he said.

    The first Courts megastore, pictured above, opened at Bekasi, in Kota Harapan Indah, on the eastern side of Jakarta.

    Courts Asia said that as of November 2015, Indonesia accounted for 1.7 per cent of the company’s total sales of S$186.1 million – up 4.2 per cent year-on-year.

    Indonesia is expecting retail growth of between 11 and 12 per cent this calendar year, after a modest 8 per cent growth in 2015.

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  • Second Courts store in Indonesia begins construction

    Second Courts store in Indonesia begins construction

    Courts Asia, the operator of retailer Courts Megastore, began with construction of its second outlet in Indonesia on Thursday, as the company races to tap into the country’s growing middle-income group.

    The three-storey structure will boast 20,400 square metres of retail space in Bumi Serpong Damai, a satellite city located south of Jakarta, said Terence Donald O’Connor, Courts Asia’s executive director and group chief executive.

    That would dwarf Court’s first store in Bekasi, which offers 12,000 square metres of soft retail space and is currently the biggest Courts Megastore in Southeast Asia.

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