Profits Grow at Luxury Watch Retailer Cortina Holdings

Cortina Holdings (SGX: C41) announced its full year results on Wednesday. As a retailer of high-end timepieces in Southeast Asia, it’s actually one of the main competitors of The Hour Glass (SGX: E5P).

Between the financial year ended 31 March 2009 (FY2009) and FY2013, Cortina had grown its profit by a really high compounded annual rate of 27.2%. Let’s see how it fared in its latest completed financial year.

Operating results

Cortina ended FY2014 with revenue of S$415 million, which is 13% higher compared to a year ago. This is mainly due to an expansion in the number of storefronts the company had. During the year, it had set up  a Patek Philippe and Rolex boutique in the capital of Malaysia in addition to opening a multi-brand boutique in Thailand.

The company’s expenses remained relatively stable, resulting in its net profit increasing by 11.3% to S$18.4 million.

FY2014 had also seen Cortina’s balance sheet improve from the previous year with its net debt position (total debt minus total cash) decreasing from S$105 million to S$96 million.

Going Forward

In a situation similar to The Hour Glass, Cortina is expecting the macro-economic environment to be challenging at least for the year ahead. Because of that, the company will be exploring new ventures with restraint and caution. In FY2015, the company’s not just looking to add new stores but will also be trying to strengthen its existing ones by growing their size.

Foolish Summary

Cortina had recommended an annual dividend of S$0.03 per share (consisting of a special dividend of S$0.01 and a final dividend of S$0.02) for FY2014. By way of comparison, the company had also paid out the same amount of dividend in FY2013.

Cortina’s shares are currently trading at S$0.83 each, giving them a trailing Price to Earnings ratio of 7.5 times and a historical dividend yield of 3.6%.

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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 Stanley Lim doesn’t own shares in any companies mentioned.