Singer records Rs. 55 b revenue for FY20; 11% rise in PAT amidst challenging biz environment

The Singer Group has reported a Full Year 2019/20 consolidated revenue of Rs. 55 billion with an 11% rise in Profit After Tax (PAT) despite the ongoing challenging business environment. Additionally, the group’s consolidated gross profit for the year increased by 2% to Rs. 16.4 billion and at the company

Chairman Mohan Pandithage

Co-Chairman Dhammika Perera

Group Chief Executive Officer Mahesh Wijewardene

level, gross profit increased by 6% to Rs. 13 billion.  Consolidated Profit Before Tax (PBT) for FY 2019/20 is recorded at Rs. 611 million which is a decrease of 9% from the previous year.

Consolidated PAT of Rs. 427 million showcased a growth of 11% compared to Rs. 386 million during the previous year. The company also recorded a net PAT of Rs. 13 million, compared to Rs. 140 million achieved last year. The Group’s total comprehensive income for the year is reported at Rs. 449 million. 

During the financial year, Singer Group revenues were adversely impacted mainly by the 19 April Easter Sunday Attack and its prolonged impact on the economy, mobile phones sales drop due to US/China restrictions, and the recent island-wide shutdown due to the COVID-19 pandemic. 

Despite a decline in revenues, consolidated operating profit recorded a growth of 3% to Rs. 4.1 billion and at company level, operating profit had a growth of 17% to Rs. 2.8 billion, reflecting wider gross profit margins and improved cost efficiencies.

The improvements in gross profits reflects the group’s timely decisions in product margin management and well-balanced product marketing mix, continued growth in hire purchase interest income and ongoing emphasis on streamlining processes. Accordingly, the consolidated gross profit margin was raised to 30% on a cumulative basis from 27.5% in the previous year.

Group administration and selling expenses had witnessed a marginal 1% decrease compared to the previous year with company, selling and administration expenses also decreasing by 2%. 

Group and company net finance cost increased by 6% and 28%, respectively, in comparison to the previous year mainly due to recording of interest on lease liabilities as per the implementation of the new SLFRS 16 accounting standard. 

Excluding interest on lease liabilities, the group’s net finance cost decreased by 15% whilst the company reported a marginal 1% increase. Focused efforts towards effective working capital management coupled with the gradual decline in interest rates enabled the group to record a 15% reduction in net finance costs. This is excluding the IFRS 16 impact.

Commenting on the FY performance, Group Chief Executive Officer Mahesh Wijewardene said: “Despite a difficult business environment and continued challenging external environment as a result of the COVID-19 pandemic and ensuing economic ramifications, we continue to drive forward persistently. While the anticipated strong earnings and an overall solid performance did not materialise at the end of the financial year, we will continue to strengthen our businesses and further increase our competitiveness to deliver sustainable profitable growth in the future.”

Note on COVID-19 Impact

Following the spread of COVID-19 in Sri Lanka and resultant lockdown and curfew, the group/company retail and manufacturing operations were adversely affected from 15 March to 10 May. The group/company experienced disruption in retail sales, collections of trade debtors, hire purchase collections, and lease instalment collections during this period, and this is likely to continue in Q1 and Q2 as a result of anticipated negative sentiments from the macro- and micro-economic environment. The group expects retail operation to be normalised in Q2 (FY 20/21) onwards. 

Singer (Sri Lanka) Group is the largest retailer, financier and manufacturer of consumer durables in Sri Lanka. The company has 425 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 house brands, the company is the exclusive distributor for many well-known international consumer durable brands.

The Board of Directors of Singer (Sri Lanka) PLC comprises Chairman Mohan Pandithage, Co-Chairman Dhammika Perera, Group Chief Executive Officer Mahesh Wijewardene, Deepal Sooriyaarachchi, Dumith Fernando, M. H. Jamaldeen, Sarath Ganegoda, and Dilip de S. Wijeyeratne.