11 November 2009
BSE-listed furniture retailer Furnmart has released impressive financial results to July 2009 in which it registered a 51.1-percent growth in Earning Per Share (EPS) to P1.58.
In the reporting period, revenue increased by 15.5 percent to P565.7 million, as contribution to the top line by recently established stores continued to manifest in performance.
Operating profit increased by 30.2 percent to P113.1 million, while profit before tax increased by 56.4 percent to P105.8 million. The increase is attributed to a reduction in impairments brought about by improved collections on customer accounts as well as a slow down in the numbers of stores opened, which meant lower start-up costs were incurred.
Other contributors to the rise in operating profit include an increase in interest income to P1.6 million from a net interest expense of P10.2 million in the financial year owing to a rights issue in May 2008 that raised over P 65.6 million in capital.
The operating margin improved by 230 basis points to 20 percent, while the profit before tax margin improved by 490 basis points to 18.7 percent in 2009. Despite taxation increasing by 37.3 percent to P25.2 million, a lower tax charge (23.8 percent against 27.2 percent in financial year 2008) resulted in profit after tax growing slightly higher at 63.5 percent to P80.7 million.As a result, the profit margin increased by 420 basis points to 14.3 percent. Earnings per share growth (51.1 percent) was lower than profit after tax growth owing to an 8.2-percent shared dilution resulting from the rights issue conducted at the close of financial year 2008.
A final dividend of P0.34 was declared, which is 57.9 percent above the 2008 level."Management notes that though the effects of the global financial crisis took longer to impact on the business, the event has now caught up with operations, leading to a deterioration in trading conditions in the fourth quarter of the year," said a company statement accompanying the results. "A resulting decline in collections is expected to reverse the reduction in impairments recorded in financial year 2009. The first Home Corp store in South Africa will be opened before the fall of 2009 and any further growth is expected to be opportunistic and therefore difficult to predict."
Meanwhile, tourism concern Chobe Holdings has felt the pinch of the economic recession as tourist volumes fell in the first half of their financial year to August 2009.
Chobe reported a 30-percent decline in EPS to P0.20 as revenue declined by 22.3 percent to P56.3 million on the back of a 33.9-percent decline in bednights sold to 18,918.
As a result, the occupancy rate declined to 36 percent from 53 percent recorded in the comparative period last year. Operating profit registered a 33.9 percent decline to P18 million on the back of a 13.4 percent increase in operating expenses, culminating in the operating margin declining by 560 basis points to 32 percent.
Profit before tax declined by a slightly smaller margin (-28.4 percent) to P20.6 million, resulting in the profit margin declining by 320 basis points to 36.5 percent.A 1.1-percent increase in net finance income and a P1.1 million gain on disposal of an investment in a subsidiary helped reduce the decline in profit before tax. Profit after tax declined by 24.5 percent to P 17.9 million, aided by a 46.9 percent decline in the tax charge to P 2.7 million.
The company's operations were mainly affected by a decline in occupancy rates and the depreciation of the US Dollar in which revenues are earned. A 198.8-percent increase to P 0.5 million in the currency translation losses resulted in total comprehensive income declining by 26.1 percent to P 17.4 million.
No interim dividend has been declared.
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