Saturday, March 30, 2013

Second Chance Properties hit by sharp fall in fair-value gain

The Business Times  |  MARCH 28, 2013
It intends to pay dividend of 3.4 cents a share for FY2013

A substantial fall in fair-value gain resulted in Second Chance Properties posting a sharp drop in earnings for the second quarter ended Feb 28.

But the company announced yesterday that, barring unforeseen circumstances, it intends to distribute a dividend of 3.4 cents per share for FY2013.

Fiscal Q2 saw net profit tumbling 42.4 per cent to $3.02 million from a year ago.

The fall was due to a 79.2 per cent drop in gain on fair valuation of investment properties to $430,000 from $2.06 million a year ago. Revenue rose 9.6 per cent to $10.1 million.

Earnings per share were more than halved to 0.46 cents from 0.95 cents. Net asset value fell to 33.58 cents from 35.72 cents at end August 2012.

Gearing ratio was 0.21 per cent, from 0.19 per cent as at the end of the previous half-year.

For the half year, net profit slid 28.8 per cent year-on-year to $6.4 million, while revenue was 4.7 per cent higher at $19.5 million.

It attributed the poorer six-month bottom line to a drop in retail prices of gold, which weighed down on its gross profit margin, and lower contributions in its property segment due to the absence of a $2.79 million fair-valuation gain on properties held for sale that was received in FY2012.

The company said it faces an uncertain economic outlook. Though it expects its gold business to stay afloat, the fall in gold prices will eat into profits if it continues to slip.

It said its apparel business is expected to do well while rental income for the current financial year will be lower due to disposal of few investment properties.

The group is banking on anticipated positive contributions from property revaluations to boost its performance.

Shares of the group closed unchanged at 41.5 cents yesterday.

Martin Koh | 86666 944 | R020968Z
Sherry Tang | 9844 4400 | R020241C

Senior Sales Director
DTZ Property Network Pte Ltd (L3007960A)

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