Second Chance Properties reports fiscal 1H net profit fell 8 percent

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Second Chance Properties reported Wednesday its fiscal first half net profit fell 8 percent on-year to S$4.6 million on lower revenue from the gold and property businesses, offset by improvements in the apparel and securities segments.

Revenue for the six months ended 28 February declined 1.86 percent on-year to S$16.12 million, the company said in a filing to SGX.

Apparel

The apparel segment posted fiscal first half revenue increased 15.38 percent on-year to S$450,000, as a decline in Singapore revenue was offset by higher sales in Malaysia.

“In Malaysia, the revenue decreased in prior [financial period] 2021 because of imposition of Movement Control Order there, resulting in closure of our retail outlet for almost two months. The change in consumer preferences and the increasing trend of online shopping mainly contributed to the decreased revenue from this business segment in Singapore,” the company said. 

However, the apparel segment’s loss for the period widened to S$550,000 from S$480,000 in the year-ago period due to year-earlier interest on a fixed deposit in Malaysia, the filing said.

The gold segment reported revenue fell 15.48 percent on-year to S$10.43 million on general market conditions. 

Property

The property segment posted rental revenue declined 12.45 percent on-year to S$2.18 million, and its profit contribution for the fiscal first half was S$2.30 million, down 15.13 percent on-year. 

“The rental actually dropped due to loss of rental income from sale of nine investment properties since the end of the last period as well as lower rentals received on some lease renewals,” Second Chance Properties said. The year-earlier period also had a property tax rebate, the filing said. 

Securities

Securities revenue jumped 155 percent on-year in the six-month period to S$3.06 million, Second Chance Properties said. 

“The group has been investing substantially in equity securities classified as financial assets, at fair value through other comprehensive income since last year and has received dividends,” the company said.

However, the segment’s profit rose only 29.73 percent in the six-month period to S$2.30 million on an unrealised foreign-exchange loss of S$550,000 on borrowings used to purchase securities, compared with a year-earlier foreign exchange gain of S$610,000, the filing said.

Outlook

Second Chance Properties issued a cautiously upbeat outlook. 

“Countries worldwide have been more resilient to the new variants of Covid-19. Singapore too has been easing the safe management measures as well as opening international borders for tourists while moving towards the path of economic recovery,” the company said. 

But it added, “changes in consumer spending habits coupled with the ever increasing trend of online shopping and intense competition continue to affect our apparel business.”

The company said it expected the gold business’ profitability would remain good, while rental income would fall due to the divestment of nine properties. 

“The group continues adding more high dividend stocks to its portfolio which will lead to a further significant increase in dividend income for FY 2022 compared to FY 2021,” the company said. “Market forces, interest rates as well as government stimulus will continue to determine the performance of the financial instruments sector.”

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