Here Are 2 Companies That Recently Announced Growth In Their Latest Earnings Updates

We’re in the midst of the earnings season. As is common with every earnings season, there will be some companies posting growth, some posting mixed numbers, and some experiencing declines. Let’s take a look at two companies that delivered growth recently:

1. In late April, Sheng Siong Group Ltd (SGX: OV8) released its 2018 first quarter earnings update. As a quick introduction, Sheng Siong is one of the largest supermarket chains in Singapore with 48 stores located primarily in the heartlands of the island. The company also has one supermarket in China.

In the first quarter of 2018, Sheng Siong experienced a 5.1% year-on-year increase in revenue to S$228.3 million. Similarly, its gross profit improved by 10.0% to S$59.8 million due to higher revenue and higher gross margin. Consequently, its net profit attributable to shareholders grew 6.6% year-on-year to S$18.3 million. For the quarter, Sheng Siong generated operating cash flow of S$14.2 million, up from S$7.6 million a year ago. As of 31 March 2018, Sheng Siong’s balance sheet housed zero debt and S$78.6 million in cash and equivalents.

Lim Hock Chee, Sheng Siong’s chief executive officer, provided some guidance on the company’s future plans in the latest earnings update:

“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. In line with our gross margin enhancement initiatives, we remain committed to work towards a sales mix with a higher proportion of fresh produce and reducing the input costs by increasing direct purchasing and bulk handling.”

2. iFAST Corporation Ltd (SGX: AIY) also released its 2018 first quarter earnings update in late April. The company, an  Internet-based investment products distribution platform that has a presence in Singapore, Hong Kong, Malaysia, China, and India, experienced a great quarter.

Net revenue was up 28.7% year-on-year to S$14.38 million, while net profit attributable to shareholders jumped by 52.6% to S$2.75 million. The company’s growth came on the back of a 24.8% year-on-year increase in its assets under administration (AUA) to S$8.07 billion in the first quarter of 2018. The company also hiked its interim dividend by 10.3% from 0.68 cents in 2017’s first quarter, to 0.75 cents.

iFAST’s net revenue growth was broad-based, as net revenues in Singapore, Hong Kong, Malaysia and China were up by 21.5%, 41.9%, 51.1%, and 216.4%, respectively, on a year-on-year basis. iFAST also ended the reporting quarter with a strong balance sheet that housed S$18.3 million in cash and just S$17,000 in total debt.

Regarding its outlook, iFAST expects its business performance in 2018 “to be better than in 2017,” “barring any unforeseen adverse circumstances.”

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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. The Motley Fool Singapore has recommendations on Sheng Siong Group and iFAST Corporation.