Singer records rise in sales, profits impacted due to provision for deemed VAT

Tuesday, 3 June 2014 02:01 - - {{hitsCtrl.values.hits}}

Singer (Sri Lanka) has announced an 8% increase in Group revenue in the first quarter of the 2014 financial year, compared to the same period of the previous financial year. The Group’s gross profit continued to climb, increasing by 7.3% during this period. However, after setting aside Rs. 46 million in order to address any potential liability caused by the possible imposition of deemed VAT in 2014, growth in gross profit fell to 5%. Group profit decreased by 24%, due primarily to this provision for deemed VAT, as well as an increase in expenses. Selling and administration costs rose by 14%, due to inflation and an increase in rents and electricity expenses. The Group’s net finance costs, however, decreased by 13%. Singer Finance, a Group subsidiary, reported an increase in revenues of 7%, although net profit declined by 6%.

Relatively low customer demand also tempered growth, with a sluggish business environment impacting most major retailers. Although the economic environment posed a number of challenges, Singer’s industry-best systems and culture have allowed it to weather the storm. For example, the Group has been able to leverage its state-of-the-art online real-time ERP system, as well as its call centre service, SMS reminders and more traditional collection drives to ensure that the collections process was well managed. In spite of the challenging business environment, Singer was happy to note that revenue increased in the electronics and white goods segments, which are critical drivers of the Group’s growth. Revenue from the Group’s communications segment continued to increase and recorded a growth of 20%. With the nation’s most extensive retail and service network, Singer Sri Lanka is well positioned to reap the benefits of an improving economy. The Group currently operates more than 400 outlets island-wide and offers a staggering selection of the world’s best brands and products, giving customers unrivalled access to the lifestyle they desire. Singer Sri Lanka has also snagged the country’s most coveted brand accolades, including ‘People’s Brand of the Year,’ ‘Youth Brand of the Year’ and ‘Consumer Durables Brand of the Year’ and looks set to continue its dominance of the industry it has pioneered.