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21 Consecutive Quarters of Profit Growth at Osim

osim outletOSIM (SGX: O23), Asia’s No. 1 brand in well being and healthy lifestyle products, made public on Tuesday that it had achieved another outstanding quarter when it released its first quarter results. It saw 21 straight quarters of net profit growth.

For the quarter, both revenue and net profit increased 15% year-on-year to S$172.6 million and $28.8 million respectively. Net profit margin remained stable at 16.7%. Earnings per share correspondingly surged 14.3% to 4.0 Singapore cents, from 3.5 Singapore cents in the previous year.

The rise in revenue from S$150.6 million in the previous year to S$172.6 million in the latest quarter was due to higher consumer demand for OSIM products such as uInfinity, uDivine App, uDiva, nutritional supplements like Taut, Stem C and Triflex and luxury tea like Sakura Tea and Follow Me Tea. TWG Tea, which became a subsidiary of OSIM in October last year, contributed to part of the sales as well. The luxury tea company has 30 outlets currently and OSIM is targeting to open another 15 more by end of the year.

OSIM, which has 583 outlets in 30 countries, saw 53% of the first quarter’s revenue come from North Asia, 42% from South Asia and the rest from America/Africa/Europe/ Middle East/Oceania. The firm is targeting to open 20 to 30 more OSIM outlets this year.

As of 31st March 2014, the firm had a cash balance of S$265.2 million and total borrowings of S$109.4 million. This was an improvement from the end of 2013 where it had S$112.8 million, net of total borrowings.

One slight blip was that for the quarter, operating cash flow dipped 23% to S$19.9 million mainly due faster repayment of creditors to enjoy better terms and more inventories in preparation for launch of new products.

To reward shareholders, an interim dividend of 1.0 Singapore cent per share was declared, unchanged from last year.

OSIM shares closed at S$2.86 on Tuesday. It is currently trading at a historical PE ratio of 21 and sports a dividend yield of 2%.