Reflecting a strong turnaround delivering an impressive surge in Q3 profits for the year 2019/20, the Singer Group reported consolidated profit after tax of Rs. 341.4 million, compared to Rs.17.4 million in the corresponding quarter of the previous year.
The mainstays of this significant improvement was due to growth across key product categories as a result of targeted marketing efforts, an improvement in gross margins as well as a reduction in the Group’s finance costs. On a cumulative basis for the nine months of FY 2019/20, the Group achieved a growth in profits of 4% to Rs.366.4 million.
Contributing to this momentum was Singer (Sri Lanka) PLC, the marketing arm of the Group, showcasing a notable turnaround, posting a profit after tax of Rs.291.7 million compared to losses of Rs.109.3 million in comparison to the previous year.
With consumer sentiments demonstrating a gradual recovery following the adverse effects of the Easter Sunday attacks in April 2019, consolidated revenue generated in Q3 amounted to Rs.15.5 billion, a marginal decline over the previous year while for the nine month period the Group recorded revenues of Rs. 42.6 billion.
Meanwhile Q3 consolidated gross profit increased to Rs. 4.6 billion from Rs. 4.2 billion on a cumulative basis. Improvements such as re-pricing decisions in selected products, continued growth in hire purchase interest income and ongoing emphasis on streamlining processes reflect the positive effects of management’s efforts. Consolidated operating profit recorded a growth of 22% to Rs.1.3 billion in Q3, demonstrating recovering sales volumes, wider gross profit margins and improved cost efficiencies. On a cumulative basis operating profit amounted to Rs.3.2 billion, a marginal decline compared to the corresponding period of the last year.
Ongoing focus on effective working capital management coupled with the gradual decline in interest rates enabled the Group to record a reduction in net finance costs during Q3. On a cumulative basis, net finance costs too recorded a marginal decline contributing to overall profitability.
Commenting on these results, Mahesh Wijewardene, Group Chief Executive Officer said, “We are optimistic on the medium to long-term recovery of the consumer durables market, particularly given the recent tax concessions and the relatively accommodative monetary and fiscal policy stance adopted by the Government. The Group will continue to place strategic emphasis on driving volume growth across key product categories through targeted marketing while managing its costs through streamlining processes, digitisation and effective working capital management.”
Singer (Sri Lanka) Group is the largest retailer, financier and manufacturer of consumer durables in Sri Lanka. The company has 439 retail stores as well as a fast growing e-commerce platform. The company also serves over 2,800 dealers/sub retailers. It is also renowned for its after-sales service network with 14 Regional Service Centres and over 300 service agents. Apart from its household brands, the company is exclusive distributor for many well-known international consumer durable brands.
The Board of Directors of Singer (Sri Lanka) PLC comprise Mohan Pandithage – Chairman, Dhammika Perera – Co-Chairman, Mahesh Wijewardene – Group Chief Executive Officer, Deepal Sooriyaarachchi, Dumith Fernando, M. H. Jamaldeen, Sarath Ganegoda and Dilip de S Wijeyeratne.