Net Profit Plunges 68% at F J Benjamin

fj benjamin logo Weakness in North Asia and increasing competition in Singapore saw the revenue for F J Benjamin Holdings Limited (SGX: F10) for Financial Year 2013 (FY2013) go down by 5% to $373.4 million over the previous year. The turnover from the fashion business went up 4% to $262.9 million while the timepiece business decreased by 22% to $109.8 million. Sales of timepieces declined due to the slowdown in China’s economy and reduced tourist expenditure in Hong Kong by mainland Chinese visitors.

The net profit plummeted 68% to $4.4 million in FY2013 as compared to FY2012. The net profit included a gain of $2.8 million from the sale of properties in Hong Kong. Stripping off this one-off gain, the net profit for FY2013 would have been $1.6 million, 89% lower than the previous year.

The earnings per share (EPS) for FY2013 was at 0.78 Singapore cents, a decline of 68% over FY2012 where it was at 2.44 Singapore cents.

As of 30th June 2013, the company has $78.2 million in total debt as compared to $65.9 a year ago. The increase in debt is to “invest for future growth and expansion”.

There was a net cash of $9.3 million used in operations for FY2013 as compared to a usage of $6.8 million in FY2012. Capital expenditure for FY2013 was at $10.7 million while that in FY2012 was at $8.5 million.

Chief Executive Officer of F J Benjamin Holdings, Nash Benjamin, said: “It has been a challenging year. Consumer sentiments in the countries we operate in have been depressed, with the biggest effect on our timepiece business in North Asia which fell by 31% due to reduced spending by Chinese consumers. In addition, rent and labour costs in Singapore continue to increase, putting pressure on operating margins.

F J Benjamin has secured distribution rights for Tom Ford, Valextra and Superdry. It will also open a Goyard store in Singapore before the end of this year.

The company declared dividends of 0.5 Singapore cent per share, down from 1.0 Singapore cent per share a year ago. The shares closed at $0.255 on 26th August 2013. It carries a PE of 32.7 and a dividend yield of 1.96%, based on the results of FY2013.

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