KUALA LUMPUR (Aug 25): Padini Holdings Bhd recorded a 6% rise in its fourth quarter profit, which boosted its full financial year 2017 (FY17) earnings up 15%, with the opening of new stores and higher turnover from existing ones.
The group's fourth quarter ended June 30 net profit came in at RM39.48 million, compared with RM37.36 million a year ago, while revenue grew 32% to RM460.49 million from RM348.88 million.
The group announced a first interim dividend of 2.5 sen per share, payable on Sept 29, in respect of FY18.
Full FY17 profit was RM157.39 million compared with RM137.39 million in FY16, while annual revenue rose 21% to RM1.57 billion from RM1.3 billion, with an 8% same-store sales growth throughout the year.
"Another reason for the improved performance was the opening of 14 new stores during the current 12-month quarter. The 14 new stores consist of six Padini Concept Stores, seven Brands Outlets and one free-standing store.
"Approximately RM71 million or 4.5% of total revenue were contributed from these 14 new stores starting from Nov 2016 to June 2017," Padini said in its quarterly report to Bursa Malaysia today.
However, gross profit margin had dropped from 42% to 39%, as inventories had been written off in the last quarter and the group’s strategy was to maintain retail prices despite rising costs.
"There is an increase of RM22 million on inventories losses, inventory written off and inventory written down compared with last financial year. This is an initiative of the management to embark on a more stringent implementation of the inventory policy with the use of stricter write off/write down estimates. Excluding the effect of the additional inventories losses, the gross profit margin stood at 40.8%," it said.
Going forward, the group said it was confident of turning in another profitable period despite the challenging economic environment and rising costs.
"The management will continue to be vigilant to the changes in the external environment and take necessary action, including reviewing our cost structure in order to maintain long-term sustainable growth," it added.
Shares in Padini closed down 6 sen or 1.4% at RM4.23, giving the counter a market value of RM2.79 billion. Year to date, the stock has climbed some 67%.
http://www.theedgemarkets.com/article/padinis-full-year-profit-15-4q-improves
