Courts Asia

Share price not really moving though...

The end-year report of the company is announced.

Revenue increased by 4.6%, but net profit decreased by 31.6%, due to increased expense in finance, which is logical with enlarged debt.

http://infopub.sgx.com/FileOpen/CAL_Q4FY...eID=299425

(not vested)

If you do some scuttlebug you will noticed that they keep offering discount to draw the customer...
How many more "discount" can they dish out?

Giving credit to those who has subprime credit rating hardly seems like a great business model


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(30-05-2014, 10:56 PM)VIChris Wrote: If you do some scuttlebug you will noticed that they keep offering discount to draw the customer...
How many more "discount" can they dish out?

If you ever asked further, the discount only available for Flexi-plan users. Court is promoting its credit service, rather the product sales.

Hi all, I am puzzled by what Courts is not doing right. I see Courts as an consumer electronics, a furniture retailers and a electrical appliance seller all-in-one company. So perhaps something like putting Challengers, IKEA and Best Denki together. Individually, they seems to be doing quite well (not sure about Best Denki). I thought putting all three together would have achieved greater cost-saving in space and staff. So how did Courts ended up faring worse in term of achieving profit from normal sale?

I guess inventory turnover. Furniture and appliance turnover is quite low compared with consumer electronics. The margin is very low, what matters is sales. How much can you leverage your fixed cost.

Correct me if I am wrong. Consumer electronics is quite tough since late last year in Singapore. The tablet honeymoon seems passed.

So am can I assume that consumers prefer Challenger for consumers electronics, IKEA for furnitures and Best for electrical appliances. Courts strategy for sale is their credit plan.

It is not necessarily true. Consumers now are very smart, they will compare the price and buy from the one offering the best value for money. But IKEA probably provides more selections for furniture than Courts. That affects turnover, too. Diversification does have its benefit. When one category of products suffers, the others might save you, e.g. when consumer electronics are getting tougher, appliance might become better or furniture. Check the inventory turnover of Challenger, it is getting lengthier too(a quick look only).

Plus, the credit sale of Courts in Singapore is very low. Credit sale is mainly in Malaysia.

SG is more like a pure retail market for them. I agree that credit sales is more in Malaysia now and it appears to be decreasing year on year. If one is applicable for a credit card, why would they elect for the Courts credit facility; this might be the key reason of decline with their Malaysian credit sales. As the middle income group gets richer, they would have a decreased need for such "financing solutions".

Hence, a near term catalyst might be their expansion into Indonesia. A comparison of wages per individual for Malaysia might help us potentially understand how long can this Credit policy potentially last in Indonesia!
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