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10 Quick Things That Investors Should Know About Sheng Siong Group Ltd’s Latest Result

Last week, Sheng Siong Group Ltd (SGX: OV8) announced its 2018 first quarter (1Q FY18) earnings update. As a quick introduction, Sheng Siong is one of the largest supermarket chains in Singapore. The company’s network of 48 stores are primarily located at the heartlands of the island. The company was established in 1985 and listed in 2011.

Here, we will look at 10 things that investors should know from its latest earnings update:

  1. Sales revenue for the quarter improved 5.1% year-on-year to S$ 228.3 million.
  2. Gross profit improved 10.0% year-on-year to S$ 59.8 million.
  3. Quarterly net profit grew 6.6% year-on-year to S$18.3million.
  4. Similarly, 1Q FY18 earnings per share (EPS) was up by 6.1% year-on-year to 1.22 cents.
  5. Gross margin % for the 1Q FY18 was 26.2%, 1% higher than that in 1Q FY17. Higher margin was driven by higher sales mix of fresh products and suppliers’ rebates on marketing efforts.
  6. For the quarter, Sheng Siong generated operating cash flow of S$ 14.2 million, up from S$7.6 million last year.
  7. Sheng Siong’s borrowing stood at zero while its cash and cash equivalents stood at S$78.6 million as at 31 March 2018, giving it a net cash position of S$78.6 million.
  8. Total revenue growth of 5.1% was driven by new stores opening (6.7%), comparable same store sales (5.6%) and supermarket in China (0.8%), offset by closure of Verge and Woodlands Block 6A (- 8%).
  9. The company did not recommend any dividend for the quarter.
  10. The company provided guidance on future plans:

“We are pleased to open four new stores in Singapore in this quarter, further expanding the total retail area in Singapore to 436,000 square feet. With the opening of the four stores at Fernvale Street, Anchorvale Crescent, Canberra Street and ITE Ang Mo Kio, the Group’s total number of stores has increased to 48 stores excluding the supermarket in China. Besides that, we have also successfully bid for two new stores at Bukit Batok Block 440 and Yishun Block 675 which are expected to be operational in 2Q2018.

Moving ahead, we will continue with our efforts in expanding the network of outlets in Singapore, especially in areas where our potential customers reside and build our brand in China. In addition, we remain focused on nurturing the growth of our new stores as well as rejuvenating the old stores to attract and retain our customers.”

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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 Lawrence Nga doesn’t own shares in any companies mentioned. Motley Fool has a recommendation for Sheng Siong Group Ltd.