https://www.businesstimes.com.sg/compani...end-payout
Of interest also was when CLG CFO Mr Tan Wee Ko rather derisorily replied the young chap who asked about returning more of the cash hoard via dividends :
"I keep on hearing this S$20 million magical number; it looks like you all already know the business more than us in management know our business. But to tell you honestly actually, to participate in an IT show, basically the full purchase of the stocks that we need for that four-day IT show could be more than S$12 million, S$15 million, just for the four days. I think you all have your own views on how much cash we need; similarly we also have our own views of how much cash we need."
It struck me as a rather high number when I first heard it from his mouth, and a cursory analysis shows that this instinct might well be correct (correct me if i'm wrong) :
1) Challenger is paying rental deposits, renovating, outfitting, and stocking 3 stores in 2019 spanning 7,700 sqft of space..... for
$3.5million in capex...
2) The 2018 AR states that it is holding on to a total of
$37.939million of inventories.... across
39 retail outlets.
3) IT fairs are occasions where people throng to find good deals, hopefully to buy big-ticket items. Supposing the
cost price of such an item is $1,500 (iphone? laptop? desktop?). Thus, the CFO is suggesting that, on the low end of his estimate (12million), CLG is stocking up on
8,000 big ticket pieces of inventory just for the 4-day IT fair. Supposing they're selling off only half of these.. and sales are spread evenly through the 12 hours of each of the 4 days, does this not suggest that they are expecting sales of 80-90 big ticket items
per hour? I would be overjoyed to be able to sell 80 RAM sticks an hour @ $100-150 each but are sales at IT fairs for consumer IT products really at a rate of one big-ticket item per minute?
Even factoring in costs for a large booth at a typical trade show (anything from 100-500k) - I am still inclined to think the CFO might be off by an order of magnitude here....
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