SINGAPORE (May 2): FJ Benjamin Holdings reported earnings of $0.3 million for the 3Q ended March, down 19% from its $0.37 million net profit in 3Q18 mainly due to lower revenue and a lower foreign exchange (forex) gain compared to that of a year ago.
Group revenue fell 22% y-o-y to $32.7 million from $41.8 million due to loss-making brands which were discontinued after the previous corresponding period, as well as a $1.9 million drop in sales for its Indonesian associate, which FJ Benjamin says is now directly financing more of their purchases.
The group also attributes a 5% decline in revenue from its on-going business to $30 million from $31.6 million previously to a shorter Chinese New Year festive spending period following Christmas, as the former holiday fell in early Feb this year compared to mid-Feb in 2018.
In line with the lower revenue, cost of goods sold fell 31% to $16.25 million compared to $23.4 million previously.
Staff costs declined 17% to $5.5 million from $6.6 million, while rental of premises fell a slight 6% to $5.5 million from $5.8 million a year ago.
In all, overall operating expenses fell 15% to $15.5 million, which the group says is mainly due to cost controls and the closure of non-performing stores and brands, resulting in total savings of $2.7 million.
FJ Benjamin notably registered a lower forex gain of $0.5 million over the quarter, down 66% from the $1.4 million booked in 3Q18.
Gross profit margin nonetheless improved by 6 percentage points to 50% over the quarter due to less discounts offered in stores; the discontinuance of low-yielding brands, and more targeted inventory management.
As at end-March, cash and cash equivalents stood at $3.6 million compared to the negative $0.5 million in the previous year.
“We continued to make progress in our underlying business with further growth of our operating profit. During the quarter we signed two established brands, Faure Le Page, a heritage handbag and accessory label from France which will open in July 2019, and luxury watch label, Baume & Mercier which began its distribution in April 2019,” comments group CEO, Nash Benjamin, on the latest set of results.
“The group is in the process of reviewing several new brands to strengthen our brand portfolio, and will make appropriate announcements in due course,” he adds.
Shares in FJ Benjamin closed 2.94% lower at 3.3 cents on Thursday.
