Cortina Holdings Limited’s Full-Year Earnings: What Investors Should Know

On Friday, luxury watch retailer, Cortina Holdings Limited (SGX: C41), announced its financial results for the full-year ended 31 March 2018 (FY2018). Here are 10 things investors should know from the earnings announcement:

1. Revenue for the full year rose 19% year-on-year to S$466.3 million. Sales margin improved to 23.2% as compared to 22.9% in FY2017.

2. Net profit grew 89% to S$22.3 million. The better showing was largely due to the higher revenue and better sales margin.

3. Similarly, earnings per share (EPS) for the year stood at 13.5 Singapore cents, 90.1% higher than that of 7.1 cents seen in FY2017.

4. Net profit margin for FY2018 was 4.8% as compared to 3.0% one year ago.

5. Cortina’s balance sheet strengthened for the year. As of 31 March 2018, it had S$35.5 million in cash and bank balances, and S$44.1 million in total debt. This translates to a net debt position of S$8.6 million. In contrast, at the end of March last year, it had S$50.4 million in net debt.

6. Inventories fell from S$203.9 million last year to S$181.2 million at the end of the latest period due to “more stringent controls over inventories”. However, trade and other receivables grew 41.4% year-on-year to S$12.8 million, despite revenue only rising by 19% during the same period.

7. Net asset value as the end of FY2018 was S$1.077, an increase from S$0.963 seen a year back.

8. Cash flow from operations increased by 56.1% year-on-year to S$55.5 million. With capital expenditure of S$6.0 million in FY2018, free cash flow improved to S$49.5 million, as compared to S$28.9 million in FY2017.

9. The board has declared a first and final dividend of 2.0 Singapore cents, and a special dividend of 2.5 cents, bringing the total dividend for the year to 4.5 cents. In comparison, last year, it dished out 3.0 cents in total dividend (2.0 cents in first and final dividend, and 1.0 cent special dividend).

10. Looking ahead, Cortina mentioned:

“The global economy remains volatile and may continue to pose challenges to the Group’s performance in the years ahead. On the other hand, the purchasing power of the regional consumers is rising continually. The Group will continue to review and fine tune its strategies, adapt to the changes and emerging trends in the industry and in the markets that it operates in.

Barring unforeseen circumstances, the Group will remain profitable.”

Cortina shares ended Friday at S$0.84 apiece. This translates to a price-to-earnings ratio of 6.2, price-to-book ratio of 0.8 and a dividend yield of 2.4%, excluding the special dividend.

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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 doesn’t own shares in any companies mentioned.