Singer revenue up 10% to Rs. 51.5 b; net profit down 43% to Rs. 1 b

Singer (Sri Lanka) PLC yesterday announced a 9.8% growth in Group revenue to Rs. 51.5 billion in spite of tough business conditions. However Group net profit was Rs. 1.008 billion, a reduction of 43% compared to the previous year excluding the one-time gain during 2016. 

The continuous drought in the dry zone resulted in a sharp drop in the harvest eroding the purchasing power of a large segment dependent on agriculture. Customer purchasing power was further affected by increased Value Added Tax (VAT), higher interest rates compounded by floods in the wet zone. The Consumer Durables industry, is normally affected much more than other sectors when consumer incomes decline. 

The entire industry was not in a position to pass on the increase in VAT and other costs to customers. As a result of this and the product mix gross margin reduced in 2017. The group was able to successfully lower selling and administration expenses. While the previous year recorded one-time gain of Rs. 563 million there was no one-time gain in 2017. 

Net Finance Cost for 2017 increased 32% to Rs. 1,950 million largely due to increase in interest rates and borrowings. The lower margins and high interest rates impacted the group’s profitability. Group net profit was Rs. 1,008 million, a reduction of 43% compared to the previous year excluding the one-time gain during 2016. 

While anticipating improvement in the business conditions during 2018, the Company has launched strategies to improve revenue and margins and lower costs. Noteworthy key business initiatives are:

To grow e-commerce business and to supplement the retail business

To grow the furniture business exponentially with a wider range available in a larger range of showrooms

To accelerate the renovation and expansion of existing shops to increase the retail space to cater to additional products and brands, specifically furniture

Commenting on the results, Group CEO Asoka Pieris said: “The change of ownership has been extremely positive. Singer continues to pursue its strategies to maintain market leadership in consumer durables. We believe that with additional ideas, plans and resources generated by the new owners and synergies with Hayleys PLC, a bright future augurs for the Singer Group.” 

Commenting on the outlook, Group Chairman Mohan Pandithage said: “Hayleys Group as the major shareholder is confident that Singer’s position as the leader in consumer durables will further strengthened as Hayleys and Singer have an excellent strategic fit with potential for significant growth prospects.”

Singer (Sri Lanka) Group is the largest retailer, financier and manufacturer of consumer durables in Sri Lanka. The company has 430retail stores as well as an e-commerce platform. The company also serves over 2800 dealers/sub retailers. It is also renowned for its after-sales service network with 14 service centres and over 300 service agents. Apart from its house brands, the company is a distributor for many other well-known brands.

Singer commenced business in Sri Lanka in 1877 and shares of the company are publicly traded on the Colombo Stock Exchange.