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Epicentre Posts First Loss since Listing

epicenter logo The first and largest Apple Premium Reseller in the region, Epicentre Holdings Limited (SGX: 5MQ), saw a 1.8% dip in its revenue for Financial Year 2013 (FY2013) to $178.3 million.  The decrease in revenue was mainly due to the absence of new products from Apple since October 2012, competition from other brands and prolonged uncertainty over the recovery of Europe and America markets dampening the consumers’ willingness to spend. One of Epicentre’s outlets at Suntec City was shut down for renovation for about 2 months, which resulted in lost revenue as well.

Epicentre has fully ceased operations in China, following an announcement made on 1st February 2013. After writing off the remaining book values of plant and equipment, inventories, trade and other receivables and deposits, Epicentre (Shanghai) Co Ltd reported a net loss of $2.47 million in FY2013. Stripping off this one-time loss of $2.47 million, the company still saw a loss of $1.4 million from continuing operations for FY 2013 versus a profit of $1.9 million in FY 2012.

The net loss for FY2013 was at $3.5 million, a plunge of 460.5% from FY2012, which saw a net profit of $0.98 million. This is the first net loss of the company since going public in January 2008.

The company has a total bank loan of $6.2 million and cash balances of $11.6 million.

There was a net cash outflow from operations of $1.8 million in FY2013 versus an inflow of $0.54 million in FY2012.

The results were in line with a profit guidance issued by the company on 7th August 2013 where it said the company expects a net loss for FY 2013 and the loss is “mainly attributed to, amongst others, the operating losses incurred for its operations in the Peoples Republic of China (the PRC) as well as the writing off of the Groups assets in the PRC, arising from the cessation of operations in the PRC.”

The company is not paying out any dividends. In the previous year, it paid out a dividend of 0.6 Singapore cents per share. The company’s shares closed at $0.18 on 29th August 2013.

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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 Sudhan P doesn’t own shares in any companies mentioned.