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For the current quarter, the Group reported a higher profit before taxation ("PBT") of RM20.25 million as compared to the PBT of RM14.70 million reported in the previous corresponding quarter.
Despite the revenue had dropped 3.7% to RM171.88 million, from RM178.46 million in the same period last year, PBT was higher mainly due to improvement in gross profit margin ("GPM") and better control in operating costs. The Group has adjusted its pricing strategy by reducing discounts given out as compared to last year as well as adjusted the prices for new product ranges, in particularly for Bonia and Braun Buffel brand.2Q17 YTD vs. 2Q16 YTD
For the 6 months FY2017, the Group's revenue decreased by RM34.11 million or 9.9% as compared to the corresponding cumulative quarters in the preceding year. In view of the weakened consumer sentiments and softening retail environment, the Group has embarked on a series of consolidation and rationalisation process by closing down of non-performing outlets and improve productivity. This has caused the revenue dropped by 9.9% which is within our expectation.
Despite the decrease in revenue, the Group posted an improved PBT of RM34.0 million, which is 20.0% higher than the PBT of RM28.4 million reported in the preceding year. Earnings increased due to improvement in GPM as well as better control in operating costs.
The retail sector has becoming more challenging due to rising costs of doing business, weakening Ringgit has driven up the merchandise costs. The rising cost of living and weaker Ringgit has deteriorated the consumer spending power.
Giving the uncertain economic outlook, the Group's prospects for the remaining financial year are expected to be challenging. With the continue increase in the merchandise costs due to the weakened Ringgit, the Group will continue to monitor its operating costs and cautiously adjust its selling price to cope with falling gross margin. The Group will continue its business consolidation by closing down of non-performing outlets, undertake measures to reduce operating cost to improve margin and rationalisation of business direction to increase efficiency and productivity.
Moving forward, the Group will focus and channel the resources on house brands namely, Bonia, Braun Buffel, Carlo Rino and Sembonia, consolidate and improve the performance of its licensed brands, continue to develop and strengthen its overseas markets, in particularly Indonesia and some Middle East countries.