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10 Things to Know About Second Chance Properties Ltd’s Latest Earnings

Second Chance Properties Ltd (SGX: 528) is involved in selling apparels under the First Lady brand, retailing gold jewellery under Golden Chance, property investments, and securities investments such as bonds, stocks and real estate investment trusts.

Yesterday, the firm announced its financial results for the full year ended 31 August 2017 (FY 2017). Here are 10 things investors should know from the earnings announcement:

1. Revenue slipped 11% year-on-year to S$34.8 million. The poor showing was due to declines in revenue from all its business divisions, except Gold.

2. The Apparel business’ sales fell 30% primarily due to “closure of thirteen shops in Malaysia since the end of FY 2016, the weakening Malaysian Ringgit and also intense competition there primarily due to increasing trend of online shopping”.

3. However, profit from operations managed to grow 1% to S$11.7 million.

4. Net profit surged 35.9% to S$9.5 million. The rise was mainly due to a S$1.4 million gain on fair valuation of financial assets. However, the Apparel business went into a deeper loss of S$1.9 million (before interest, tax and unallocated expenses) as compared to the loss of S$0.8 million in FY 2016.

5. As of 31 August 2017, the firm had S$6.5 million in cash and S$45.8 million in total borrowings. This translates to a net debt position of S$39.3 million, an improvement from a year ago when the net debt figure stood at S$53.3 million.

6. Second Chance Properties’ net asset value was 34.56 cents, up from 33.92 cents a year ago.

7. The current ratio (current assets divided by current liabilities) came in at 1.30 for the latest period versus 0.96 one year back. This ratio measures the liquidity of a company and the ability to finance its short-term liabilities with its short-term assets.

8. The debt-to-equity ratio, which shows a firm’s financial leverage, was 0.21 for FY 2017, an improvement from 0.25 seen last year.

9. Second Chance Properties generated S$9.7 million in free cash flow for the year (S$16 million in net cash from operations and around S$6.4 million in capital expenditures). One year ago, it raked in S$14.3 million in free cash flow. The decline was due to the purchase of available-for-sale financial asset in FY 2017.

10. Shareholders would receive a final dividend of 0.3 cents per ordinary share, up from 0.2 cents declared a year ago.

Shares of Second Chance Properties are changing hands at S$0.26 now. This translates to a price-to-book ratio of 0.75 and a dividend yield of 1.2%.

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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 owns shares in Second Chance Properties Ltd.