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9 Things You Never Knew About Courts Asia Ltd

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It’s not always easy for retail investors to gain access to a publicly-listed company’s top-level management to ask questions and gain a deeper understanding of the company’s business – we recognise that at The Motley Fool Singapore.

Thus, when any opportunity arises for me or any of my colleagues to speak to important executives of publicly-listed companies, we would aim to bring you, dear readers, any interesting insights we can glean about the company’s business.

We’ve done that previously with instant beverage manufacturer Super Group Ltd. (SGX: S10). Now, we’d like to do it with electronics and furniture retailer, Courts Asia Ltd (SGX: RE2).

Two weeks ago, my colleague Stanley Lim and I had the chance to sit down for a cup of coffee with Courts Asia’s Chief Financial Officer, Ms. Kee Kim Eng, and Regional Head of Strategy Planning & Communications, Ms. Tammy Teo. The indented portions below are nine interesting insights about Courts Asia’s business operations that Stanley and I heard from Kee and Teo.

On credit-risk control

1) For the first three insights, see here.

4) For the next three insights, see here.

7) The sales representatives at Courts Asia’s various outlets have key performance indicators that are tied to a metric called NAIA (Net account in arrears); in finance speak, arrears are unpaid, or unfulfilled parts of a loan. This is a risk management tool that prevents the company’s sales rep from colluding and offering loose credit terms.

On employee retention

8) Employee turnover is “below industry average” according to Teo. In addition, employees are given ample training in terms of both product knowledge and credit sales (the latter is actually a differentiating factor for Courts’ employees). Kim actually said:

“If we put Courts Asia’s employees into competitors’ stores, they’d survive. But if competitors’ employees came over, they can’t – they lack training in facilitating credit sales.”

On the company’s experienced management team

9) Courts Asia has been implementing credit sales in its retail operations in Singapore for more than 40 years; in Malaysia, the company’s been doing it for more than 20 years. That’s some deep-seated experience there.

The company’s leaders also have very long tenure at the company. For instance, Kee has been with Courts Asia for more than 15 years while Chief Executive Officer Terry O’Connor has an even longer tenure of “over 20 years.”

Foolish Bottom Line

Credit control is an important part of Courts Asia’s business given than almost one-fifth of the sale of products at its retail outlets are made through its various instalment plans. Thus, knowing how the company aims to improve its loan portfolio would certainly aid an investor in his or her study of it. In addition, a deeper understanding of Courts Asia’s corporate culture and the tenure of its management team can also help provide a more informed analysis of the company’s investment merits (if any).

That’s all for now. Stay tuned for more insights into Courts Asia!

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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 writer Chong Ser Jing owns shares in Super Group.