Retail Holdings N.V. Announces Strong First Half Results Deferral
Of Sewko IPO
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WILLEMSTAD, Curacao,
Oct. 22, 2013 /PRNewswire/ -- Retail
Holdings N.V. ("Retail Holdings", together with its subsidiaries
and affiliates, the "Company") (Symbol: RHDGF)
Commenting on the Retail Holdings first half results, announced
today, Stephen H. Goodman, the
Company's Chairman, President and CEO, noted, "Our operating
subsidiary, Sewko Holdings Limited ("Sewko") (the new parent
company of Singer Asia Limited), again realized record results for
the first six months of 2013, with revenue up 7.8%, and net income
up 27.5% as compared to prior year.? This strong performance,
achieved despite economic slowdowns in several of the important
Sewko markets, reflects the exceptional strength of: the Sewko
distribution system; the Singer brand; and the consumer credit
offerings; as well as management and staffs' capability and
commitment.? Retail Holdings' profit for the period was up 29.9% as
compared to prior year; earnings per share for Retail Holdings'
shareholders was $1.08 for the
six-month period.
"Retail Holdings' strategy remains unchanged ? to maximize and
monetize the value of its assets including Sewko, the Company's
most important asset, distributing the resultant funds to
shareholders.? The Company believes that this strategy is the most
compatible both with shareholder objectives and the interests of
other stakeholders. Consistent with the strategy, the Company has
distributed to shareholders funds surplus to its requirements, with
a total of $8.75 per Share having
been distributed since commencement of the distribution program in
2007.?
"Retail Holdings will not, however, agree to a disposal of
Sewko, or of any of its other assets, at less than fair value,
reflecting in the case of Sewko, the strong performance to date and
substantial future potential.? Given current equity market
conditions and ongoing economic and political uncertainties, the
Company has concluded that it is not possible at the present time
to realize fair value from a Sewko IPO.? Consequently, the
anticipated IPO and listing of the Sewko shares on the Singapore stock exchange has been deferred
until 2014.
"Sewko will pursue the many initiatives to grow revenue and
profit that have been identified, despite the IPO deferral. Of
particular note are: the extension of furniture manufacturing and
marketing, now successfully launched in Sri Lanka, to Bangladesh; the extension of consumer credit
and financial services including the introduction of a Singer
credit card in Sri Lanka; the
development of robust e-commerce platforms in Sri Lanka, Bangladesh and Pakistan, both for sales in-country and to the
substantial number of overseas workers; and the development of new
Singer businesses, initially in Myanmar and subsequently in Cambodia and Laos.
"I encourage all shareholders to read the Company's complete
Summary Semi-Annual Report for the period ended June 30, 2013, which is available at the
Corporate/Investor Section of the Retail Holdings' website,
www.retailholdings.com."
2013 First Half Results
The Company's revenue and profit increased in the first six
months of 2013, as compared with the same period prior year,
reflecting continued growth and improvement in the Singer Asia
operations.
For the six months ended June 30,
2013, Company consolidated revenue was $229.3 million, compared to consolidated revenue
of $212.7 million for the same period
in 2012, an increase of 7.8%.? Revenue at Thailand, India and Bangladesh grew by 35.4%, 12.3% and 6.8%,
respectively, which more than offset the decrease in revenue at
Sri Lanka of 1.9% and Pakistan of 15.4%.
The Company's revenue for the first six months of 2013 includes
$29.4 million of finance earnings on
consumer credit sales, compared to $24.9
million of such earnings for the same period in 2012.? The
more rapid growth in finance earnings compared to total revenue
reflects the somewhat higher proportion of credit sales compared to
cash sales than in 2012, due largely to the relatively more rapid
revenue growth in Thailand, which
has the highest proportion of credit sales.
Gross profit for the six months ended June 30, 2013 was $89.4
million, representing a gross profit margin of 39.0%,
compared to $81.2 million and a gross
profit margin of 38.2% for the six months ended June 30, 2012. The improvement in gross profit
margin is mainly due to the relatively more rapid revenue growth in
Thailand, which has the highest
gross profit margin.
Other income for the six months ended June 30, 2013 was $1.3
million as compared to $nil for the six months ended
June 30, 2012.? Other income in 2012
includes a $0.9 million loss from a
sale of $5.9 million of the SVP
Notes.
Selling and administrative expenses ("S&A") for the six
months ended June 30, 2013 were
$62.8 million, representing 27.4% of
revenue, as compared to $56.0 million
and 26.3% of revenue for the six months ended June 30, 2012. The increase in S&A relative
to revenue is again mainly due to a shift in the revenue mix to
Thailand, which has the highest
S&A as a percentage of revenue.
Other expenses, primarily royalty paid to SVP for the use of the
Singer trademark by Singer Asia and its operating companies,
remains flat, at $1.7 million for the
six months ended June 30, 2013 and
June 30, 2012.
Results from operating activities for the six months ended
June 30, 2013 were a profit of
$26.2 million, compared to a profit
of $23.5 million for the same period
in 2012. The 11.3% increase in results from operating activity is
largely due to the growth in revenue and gross profit, partially
offset by higher S&A.
Net finance costs for the six months ended June 30, 2013 were $8.1
million as compared to $6.0
million of such costs for the same period in 2012. The
increase in net finance costs primarily reflects higher debt levels
as a result of the growth in the business and of working capital,
the substantial distributions paid to shareholders last year and
higher interest rates, particularly in Sri Lanka.
The Company's profit before income tax was $18.1 million for the six months ended
June 30, 2013, compared to
$17.5 million in pre-tax profit for
the same period in 2012.? The higher profit before income tax
reflects the flow through of the increase in results from operating
activities, offset, in part, by higher net finance costs.
Income tax expense was $1.4
million for the six months ended June
30, 2013, compared to $4.7
million expense for the six months ended June 30, 2012. This represents a decline in the
effective tax rate from 26.7% in the 2012 period to 7.9% in the
2013 period. The drop in the effective tax rate is largely due to
the recognition of a deferred tax credit from unutilized tax losses
in India following the exit of
Singer India from BIFR.
For the six months ended June 30,
2013, the Company's net profit was $16.6 million compared to a net profit of
$12.8 million for the same period in
2012, an increase of 29.9%.
The profit attributable to equity holders of the Company was
$5.7 million for the six months ended
June 30, 2013 as compared to
$4.6 million for the same period
prior year. A profit of $10.9 million
is attributable to minority shareholders for the six months ended
June 30, 2013 as compared to
$8.2 million for the six months ended
June 30, 2012. A reduction in the
share of profit attributable to the owners of the Company in the
first half of 2013 as compared to the same period prior year, 34.5%
and 35.9%, respectively, reflects a shift in the profit in favor of
Thailand, where the Company's
equity ownership is the lowest amongst all subsidiaries.
The profit attributable to ReHo shareholders is equivalent to
basic earnings and diluted earnings per share of $1.08 for the six months ended June 30, 2013 as compared to basic and diluted
earnings per share of $0.87 per share
for the same period prior year.
About Retail Holdings
Retail Holdings holds three
principal assets:? 1) a 55.63% equity interest in Sewko, 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) the SVP Notes, arising from the sale of the Singer
worldwide sewing business and trademark in 2004; and 3) cash and
cash equivalents.
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 Retail Holdings Shares are available on the OTC Pink "Pink
Sheets" quotation service under the symbol "RHDGF".
Additional financial and other information about the Company
including: Retail Holdings' audited,? consolidated financial
statements for the twelve months ended December 31, 2012, and all prior statements since
September 2000, together with
Auditor's Reports thereon; the 2012 Annual Report, dated
March 2013, and all prior Disclosure
Statements and Reports since September
2000; and all semi-annual and quarterly reports and press
releases since September 2000; may be
found at the Corporate/Investor section of the Retail Holdings
website:? www.retailholdings.com.
For further information, please contact Amy Pappas at (914) 241-3404.
?
RETAIL HOLDINGS
N.V. AND SUBSIDIARIES
?
CONDENSED
CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION
JUNE 30, 2013 (Unaudited) AND DECEMBER 31, 2012
(Restated) In
thousands of US Dollars
|
|
|
?
June 30,
??????2013
|
|
Restated
??? December
31,
2012
|
|
|
|
|
|
ASSETS:
|
|
|
|
|
? Property, plant and
equipment
|
|
60,816
|
|
60,495
|
? Intangible
assets
|
|
6,679
|
|
6,735
|
? Trade and other
receivables due in excess of one year
|
|
76,422
|
|
75,236
|
? Deferred tax
assets
|
|
5,213
|
|
3,497
|
? Other non-current
assets
|
|
9,851
|
|
9,022
|
Total non-current
assets
|
|
158,981
|
|
154,985
|
|
|
|
|
|
?
Inventories
|
|
88,280
|
|
87,294
|
? Trade and other
receivables
|
|
139,351
|
|
125,478
|
? Cash and cash
equivalents
|
|
28,634
|
|
19,649
|
? Other current
assets
|
|
19,148
|
|
12,056
|
Total current
assets
|
|
275,413
|
|
244,477
|
Total
assets??????????????????????????????????????????????????????????????????
|
|
434,394
|
|
399,462
|
|
|
|
|
|
EQUITY????????????????????????????????????????????????
????????????????????????????????????
|
|
|
|
|
? Share
capital
|
|
53
|
|
53
|
? Share
premium
|
|
50,758
|
|
50,758
|
? Reserves
|
|
(3,376)
|
|
(2,502)
|
? Surplus
|
|
44,219
|
|
37,559
|
Equity
attributable to owners of the Company
|
|
91,654
|
|
85,868
|
Non-controlling
interest
|
|
101,187
|
|
98,334
|
Total
equity
|
|
192,841
|
|
184,202
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
? Loans and
borrowings over one year
|
|
58,140
|
|
37,229
|
? Employee
benefits
|
|
12,633
|
|
12,503
|
? Deferred income
over one year
|
|
162
|
|
164
|
? Warranty provision
over one year
|
|
579
|
|
458
|
? Deferred tax
liabilities
|
|
2,216
|
|
2,842
|
? Other non-current
liabilities?????????????????????????????????????????????????????????????????
|
|
6,467
|
|
5,858
|
Total non-current
liabilities
|
|
80,197
|
|
59,054
|
|
|
|
|
|
? Bank
overdraft?????????????????????????????????????????????????????????
|
|
20,427
|
|
22,471
|
? Current tax
liability
|
|
1,570
|
|
1,408
|
? Loans and
borrowings????????????????????????????????????????????????????????????????
|
|
81,403
|
|
81,301
|
? Trade and other
payables
|
|
55,005
|
|
48,153
|
? Deferred
income
|
|
1,032
|
|
1,019
|
? Warranty
provision
|
|
1,919
|
|
1,854
|
Total current
liabilities
|
|
161,356
|
|
156,206
|
Total
liabilities
|
|
241,553
|
|
215,260
|
Total equity and
liabilities
|
|
434,394
|
|
399,462
|
?
RETAIL HOLDINGS
N.V. AND SUBSIDIARIES
?
CONDENSED
CONSOLIDATED INTERIM STATEMENT OF INCOME FOR THE SIX
MONTHS ENDED JUNE 30, 2013 AND 2012 (Unaudited)
?
In thousands of US
Dollars except per Share data
|
|
|
|
Restated
|
|
June 30,
2013
|
|
June 30,
2012
|
|
|
|
|
Revenue
|
229,293
|
|
212,679
|
Cost of
sales
|
139,902
|
|
131,468
|
Gross
profit
|
89,391
|
|
81,211
|
Other
income
|
1,265
|
|
(24)
|
Selling and
administrative expenses
|
(62,843)
|
|
(56,039)
|
Other
expenses
|
(1,660)
|
|
(1,660)
|
Results from
operating activities
|
26,153
|
|
23,488
|
Finance
income
|
1,972
|
|
2,208
|
Finance
costs
|
(10,069)
|
|
(8,233)
|
Net finance
costs
|
(8,097)
|
|
(6,025)
|
Profit before
income taxes
|
18,056
|
|
17,463
|
Income tax
expense
|
(1,420)
|
|
(4,654)
|
Profit for the
period
|
16,636
|
|
12,809
|
|
|
|
|
Attributable
to:
|
|
|
|
?Owners of the
Company
|
5,741
|
|
4,604
|
Non-controlling
interest
|
10,895
|
|
8,205
|
Profit for the
period
|
16,636
|
|
12,809
|
Earnings per
share (U.S. Dollars)
|
|
|
|
?? Basic and diluted
earnings per share
|
1.08
|
|
0.87
|
|
|
|
|
SOURCE Retail Holdings N.V.