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Cordlife Chalks Up Impressing Earnings

cordlife logo Cordlife Group (SGX: P8A) just released its FY2013 results on Monday night after market close. While revenue increased 14.6% year-on-year from S$30.275 million to S$34.70 million, full year net profit almost doubled to $13.5 million from $6.9 million. This increase in net profit was partly attributed to a S$2.7 million one-time disposal gain.

Excluding the one-off disposal gain, a one-time non-recurring costs of S$1.0 million in FY2013, and the IPO expenses of S$1.9 million, core net profits increased by 33.6% year-on-year.

Mr Jeremy Yee, Executive Director and Chief Executive Officer of Cordlife, said: “We continue to maintain a high, consistent level of gross profit margin of about 73%, given our leadership position as Singapore’s largest private cord blood bank.”

He added: “With the completion of the acquisition of cord blood and cord tissue banking businesses and assets in India, the Philippines, Hong Kong and Indonesia from Australia-listed Cordlife Limited, Cordlife is now well-positioned to capitalise on the tremendous growth opportunities in these economies driven by rising affluence of the middle-class. This is line with Cordlife’s strategy to expand its geographical reach in Asia.”

With rising affluence and increasing public awareness on cord blood banking, there is a growing market for Cordlife’s services. On top of that, the penetration rates in Asia are still relatively low and have much room for growth. Lastly, Cordlife has done well to tap on the enormous population base in Asia which includes China and India.

As at June 30, 2013, the Group maintained a robust financial position, with cash and cash equivalents of S$23.3 million and a low gearing of 0.08 times. A final dividend of 1.0 cent was declared.  Together with the interim dividend of 1.0 cent, total dividends for the year was 2.0 cents.

At Monday’s closing price of S$1.28, Cordlife is trading at 22.22 times earnings and offers a dividend yield of 1.56%.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice.   Motley Fool Singapore contributor James Yeo doesn’t own shares in any companies mentioned.