WILLEMSTAD, Curacao,
Aug. 18, 2014 /PRNewswire/
-- Retail Holdings N.V. (Symbol: RHDGF)
Retail Holdings N.V. ("Retail Holdings", together with its
subsidiaries and affiliates, the "Company") announced today its
results for the first half of 2014.
Commenting on the results, Stephen H.
Goodman, the Company's Chairman, President and CEO, noted:
"Our operating subsidiary, Sewko Holdings Limited ("Sewko"), the
parent company of Singer Asia Limited ("Singer Asia"), again
achieved record revenue -- $235.1
million – for the first six months of the year, despite weak
consumer durable demand and currency depreciation in several of the
important Sewko markets. Net profit declined, however,
largely due, both to an increase in S&A expenses relative to
revenue, reflecting the Company's continuing commitment to opening
new stores, renovating and expanding existing stores, and
introducing new products, brands and services, despite what is
perceived to be a temporary economic slowdown in a number of the
Company's markets, and to an increase in income tax from 2013,
which benefitted from a one-time tax credit.
"The Board of Directors is recommending for approval at the
Retail Holdings upcoming Annual General Meeting a distribution of
$1.00 per Common Share, bringing the
total dividends and distributions paid to shareholders since
inception of the program in 2007 to $9.75 per Common Share.
"I also am pleased to report progress in the many initiatives
now under way at Sewko to grow revenue and profit. Of particular
note are the successful launch of furniture manufacturing and
marketing in Bangladesh, the
development of additional consumer credit and financial service in
Bangladesh and Sri Lanka, the launch of more
robust e-commerce platforms and TV marketing in India and Sri
Lanka, and the entrance into new markets with the opening of
the first Singer store in Cambodia
scheduled for September 2014.
"I encourage all shareholders to read the Retail Holdings
complete Summary Semi-Annual Report for the period ended
June 30, 2014, which is available at
the Corporate/Investor Section of the Retail Holdings' website,
www.retailholdings.com or can be obtained by email, telephone or
regular mail request."
2014 First Half Results
For the six months ended June 30,
2014, consolidated revenue was $235.1
million, record revenue for the first half of the
year. This compares to consolidated revenue of $229.3 million for the same period in 2013, an
increase, as measured in U.S. dollars, of 2.5%.
The Company's financial results for the six months ended
June 30, 2014 were adversely impacted
by the depreciation against the U.S. dollar of the currencies of
all of the Company's countries of operation, except
Bangladesh. The depreciation (comparing the six-month period
ended June 30, 2014 against the same
period in 2013) was especially large in India (9.4%) and Thailand (8.4%), with less substantial
depreciations in Sri Lanka (2.9%)
and Pakistan (2.2%), and a modest
appreciation in Bangladesh of
0.9%.
Measured in local currency, revenue at Singer India grew 26.8%
during the first half of 2014, as compared with the same period
prior year. Revenue at Singer Bangladesh grew 19.7% and at
Singer Sri Lanka 11.2%, while revenue in local currency declined
5.6% at Singer Thailand and 19.5% at Singer Pakistan.
Revenue, as measured in U.S. dollars, grew 20.8% at Singer
Bangladesh during the first half of 2014, as compared with the same
period prior year. U.S. dollar revenue grew 14.8% at Singer
India and 7.9% at Singer Sri Lanka, while revenue, as measured in
U.S. dollars, declined 13.5% at Singer Thailand and 21.2% at Singer
Pakistan. The relatively weak performance at Singer Sri Lanka
largely reflects economy-wide factors, particularly sluggish
consumer durable demand that became evident in the second half of
2013 and continued through the first half of 2014. The
revenue decline at Singer Thailand and Singer Pakistan largely
reflect local political uncertainties and turmoil in each of these
markets, which intensified in the first half of 2014.
The Company's revenue for the first six months of 2014 includes
$29.6 million of finance earnings on
consumer credit sales, compared to $29.4
million of such earnings for the same period in 2013, an
increase of 0.7%. The slower growth in finance earnings
compared to total revenue is due largely to the reduced revenue
contribution from Thailand, which
has the highest proportion of credit sales.
Gross profit for the six months ended June 30, 2014 was $89.5
million, representing a gross profit margin of 38.1%,
compared to $89.4 million and a gross
profit margin of 39.0% for the six months ended June 30, 2013. The reduction in gross profit
margin is due mainly to the decrease in revenue contribution from
Thailand, which has the highest
gross profit margin.
Other income for the six months ended June 30, 2014 was $0.9
million as compared to $1.3
million in other income for the six months ended
June 30, 2013.
Selling and administrative expenses ("S&A") for the six
months ended June 30, 2014 were
$65.7 million, representing 27.9% of
revenue, as compared to $62.8 million
and 27.4% of revenue for the six months ended June 30, 2013. The increase in S&A expenses
relative to revenue reflects the continuing commitment to opening
new stores, renovating and expanding existing stores, and
introducing new products, brands and services, despite what is
perceived to be a temporary economic slowdown in a number of the
Company's markets.
Other expenses, primarily royalty paid to SVP for the use of the
Singer trademark by Singer Asia and its operating companies,
increased from $1.7 million for the
six months ended June 30, 2013 to
$1.8 million for the six months ended
June 30, 2014, reflecting the growth
in revenue.
Results from operating activities for the six months ended
June 30, 2014 were a profit of
$22.9 million, compared to a profit
of $26.2 million for the same period
in 2013. The 12.6% decrease in results from operating activity is
largely due to the increase in S&A.
Net finance costs for the six months ended June 30, 2014 were $7.0
million as compared to $8.1
million of such costs for the same period in 2013. The
decrease in net finance costs primarily reflects the reduction in
interest rates, especially in Sri
Lanka.
The Company's profit before income tax decreased by 12.2% to
$15.9 million for the six months
ended June 30, 2014, from
$18.1 million for the same period in
2013. The lower profit before income tax reflects the flow
through of the drop in results from operating activities, offset,
in part, by lower net finance costs.
Income tax expense was $4.4
million for the six months ended June
30, 2014, compared to $1.4
million for the six months ended June
30, 2013. This represents an increase in the effective tax
rate from 7.7% in the 2013 period to 27.7% in the 2014 period.
For the six months ended June 30,
2013, a one-time deferred tax credit of $1.8 million from unutilized tax losses was
recognized at Singer India, following its exit from BIFR. In
addition, the share of pre-tax profit from Singer Thailand, which
has one of the lowest effective tax rates in the Company,
reflecting prior tax losses, decreased for the six months ended
June 30, 2014 as compared to the same
period in 2013.
For the six months ended June 30,
2014, the Company's net profit was $11.5 million compared to a net profit of
$16.6 million for the same period in
2013, a decrease of 30.7%.
The profit attributable to equity holders of the Company was
$3.9 million for the six months ended
June 30, 2014 as compared to
$5.7 million for the same period
prior year. A profit of $7.6 million
is attributable to minority shareholders for the six months ended
June 30, 2014 as compared to
$10.9 million for the six months
ended June 30, 2013. A reduction in
the share of profit attributable to the owners of the Company in
the first half of 2014 as compared to the same period prior year,
33.9% and 34.3%, respectively, largely reflects the decline in the
share of attributable after-tax profit from Singer Sri Lanka, where
the Company's equity ownership is the highest amongst the
subsidiaries.
The profit attributable to Retail Holdings shareholders is
equivalent to basic earnings and diluted earnings per share of
$0.73 for the six months ended
June 30, 2014 as compared to basic
and diluted earnings per share of $1.08 per share for the same period prior
year.
About Retail Holdings
Retail Holdings holds three principal assets: 1) a 54.10% equity
interest in Sewko, the parent company of Singer Asia Limited, a
distributor of consumer durable products in Bangladesh, India, Pakistan, Sri
Lanka and Thailand, with
consumer credit and other financial services available to qualified
customers; 2) seller notes, arising from the sale of the Singer
worldwide sewing business and trademark in 2004; and 3) cash and
cash equivalents. The Company has no operating activities
other than those carried out through Sewko/Singer Asia.
Retail Holdings is a Curacao
public company which is the successor company to the Singer Company
N.V. and its predecessor companies. Price quotations for the
Company's Shares are available on the "Pink Sheets" quotation
service under the symbol "RHDGF".
Additional financial and other information about the Company,
including: audited consolidated financial statements for the twelve
months ended December 31, 2013, and
all prior statements since September
2000, together with the Auditor's Reports thereon; the 2013
Annual Report, dated March 2014, and
all prior Disclosure Statements and Reports since September 2000; and copies of all semi-annual and
quarterly reports and press releases since September 2000; may be found at the
Corporate/Investor section of the Company's website.
For further information, please contact Amy Pappas at 1-914-241-3404.
RETAIL
HOLDINGS N.V. AND SUBSIDIARIES CONDENSED CONSOLIDATED
INTERIM STATEMENT OF FINANCIAL POSITION
JUNE 30, 2014
(Unaudited) AND DECEMBER 31, 2013 (Restated) In thousands of
US Dollars
|
|
|
|
|
|
|
|
|
|
June
30,
2014
|
|
Restated December 31,
2013
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
|
Property,
plant and equipment
|
|
|
61,807
|
|
61,306
|
Intangible
assets and goodwill
|
|
|
6,733
|
|
6,741
|
Trade and
other receivables due in excess of one year
|
|
|
87,215
|
|
80,950
|
Deferred tax
assets
|
|
|
6,796
|
|
5,846
|
Employee
benefits
|
|
|
-
|
|
34
|
Other
non-current
assets
|
|
|
11,250
|
|
10,005
|
Total non-current
assets
|
|
|
173,801
|
|
164,882
|
|
|
|
|
|
|
Inventories
|
|
|
88,598
|
|
78,140
|
Trade and
other receivables
|
|
|
149,076
|
|
141,410
|
Cash and cash
equivalents
|
|
|
33,167
|
|
31,118
|
Other current
assets
|
|
|
23,053
|
|
18,010
|
Total current
assets
|
|
|
293,894
|
|
268,678
|
Total
assets
|
|
|
467,695
|
|
433,560
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
Share
capital
|
|
|
53
|
|
53
|
Share
premium
|
|
|
47,152
|
|
47,152
|
Reserves
|
|
|
(5,862)
|
|
(6,340)
|
Retained
earnings
|
|
|
48,030
|
|
44,092
|
Equity
attributable to owners of the Company
|
|
|
89,373
|
|
84,957
|
Non-controlling
interest
|
|
|
106,393
|
|
104,512
|
Total
equity
|
|
|
195,766
|
|
189,469
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
Loans and
borrowings over one
year
|
|
|
56,652
|
|
63,971
|
Employee
benefits
|
|
|
13,675
|
|
13,410
|
Deferred
income over one year
|
|
|
166
|
|
158
|
Warranty
provision over one year
|
|
|
554
|
|
532
|
Deferred tax
liabilities
|
|
|
1,157
|
|
1,340
|
Other
non-current
liabilities
|
|
|
7,296
|
|
6,680
|
Total non-current
liabilities
|
|
|
79,500
|
|
86,091
|
|
|
|
|
|
|
Bank
overdrafts
|
|
|
27,896
|
|
20,008
|
Current tax
liabilities
|
|
|
1,808
|
|
1,428
|
Loans and
borrowings
|
|
|
96,598
|
|
76,824
|
Trade and
other payables
|
|
|
63,371
|
|
57,259
|
Deferred
income
|
|
|
915
|
|
764
|
Warranty
provision
|
|
|
1,841
|
|
1,717
|
Total current
liabilities
|
|
|
192,429
|
|
158,000
|
Total
liabilities
|
|
|
271,929
|
|
244,091
|
Total equity and
liabilities
|
|
|
467,695
|
|
433,560
|
RETAIL HOLDINGS
N.V. AND SUBSIDIARIES
CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME
FOR THE SIX MONTHS
ENDED JUNE 30, 2014 AND 2013 (Unaudited)
In thousands of US
Dollars except per Share data
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30,
2014
|
|
June 30,
2013
|
|
|
|
|
|
|
Revenue
|
|
|
235,063
|
|
229,293
|
Cost of
sales
|
|
|
145,598
|
|
139,902
|
Gross
profit
|
|
|
89,465
|
|
89,391
|
Other
income
|
|
|
943
|
|
1,265
|
Selling and
administrative expenses
|
|
|
(65,710)
|
|
(62,843)
|
Other
expenses
|
|
|
(1,803)
|
|
(1,660)
|
Results from
operating activities
|
|
|
22,895
|
|
26,153
|
Finance
income
|
|
|
2,220
|
|
1,972
|
Finance
costs
|
|
|
(9,256)
|
|
(10,069)
|
Net finance
costs
|
|
|
(7,036)
|
|
(8,097)
|
Profit before
income taxes
|
|
|
15,859
|
|
18,056
|
Income tax
expense
|
|
|
(4,405)
|
|
(1,420)
|
Profit for the
period
|
|
|
11,454
|
|
16,636
|
|
|
|
|
|
|
Attributable
to:
|
|
|
|
|
|
Owners of the
Company
|
|
|
3,854
|
|
5,741
|
Non-controlling
interests
|
|
|
7,600
|
|
10,895
|
Profit for the
period
|
|
|
11,454
|
|
16,636
|
Earnings per
share (U.S. Dollars)
|
|
|
|
|
|
Basic
and diluted earnings per share
|
|
|
0.73
|
|
1.08
|
|
|
|
|
|
|
SOURCE Retail Holdings N.V.