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Courts Asia
30-05-2018, 07:27 PM.
Post: #181
RE: Courts Asia
Financial Results for the Financial Year Ended 31 March 2018 ("FY17/18")

Highlights :
1. The Group reported revenue of S$713.1 million, a dip of 3.7% from S$740.5 million in the same corresponding period FY16/17
2. Group gross profit margins dipped marginally to 35.9% in FY17/18, from 36.3% in FY16/17
3. Remains profitable in FY17/18, notwithstanding a net loss position for Q4 FY17/18
4. The Group achieved profitability at S$8.1 million for FY17/18 compared to S$23.7 million for FY16/17
5. The Group’s cash position remains healthy, with strong net cash generated from its operating activities, increasing to S$108.6 million from S$98.7 million as at 31 March 2017
6. Net asset value per share was 44.7 cent as at 31 March 2018
7. No dividend is declared for the current financial period reported on vs 1.29 cent for preceding financial year.

More details in :

Courts Asia today closed at S$0.220 (+0.005).
Specuvestor: Asset - Business - Structure.
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30-05-2018, 08:53 PM. (This post was last modified: 30-05-2018, 08:55 PM by karlmarx.)
Post: #182
RE: Courts Asia
CAL is facing lower sales, higher financing costs, and greater credit risk.

1) Malaysian and Indonesian operations remaining unprofitable. The Indonesian operations look hopeless. The Malaysian operations need massive restructuring, unless the policy on interest rate limit is reversed. Refer to the segment results for better clarity:

2) Adoption of FRS 109 (for FY ending 31 March 2019) and FRS 116 (for FY ending 31 March 2020). The implication for this is bad for the P&L and very bad for the balance sheet. Everything is clearly explained here:

3) The above 2 issues will lower CAL's credit quality. As all its loans are due for repricing early next year, the implication is that CAL will likely have to pay much more to borrow. And then interest rates are rising too. Currently CAL pays about $17m in interests a year. This may increase by anywhere between $2-6m, depending on the environment then.

To CAL's credit, it seems that they are starting to pay down their loans. But then this also means its financing business is no longer growing, as its trade receivables also show.

Barring a recovery in its sales and/or ASP, it seems likely that FY18 (and beyond) will be bad for CAL. By extension, there may not be any dividends as well.

Some may say that CAL has already had a credit event when it solicited and gained approval to relax its MTN covenants. The question for (prospective) investors is whether CAL will breach these relaxed covenants in the next year or so.

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28-06-2018, 09:10 AM. (This post was last modified: 28-06-2018, 09:11 AM by CY09.)
Post: #183
RE: Courts Asia
Surprisingly, Courts has offered to do an early redemption of its bonds

With the reduction in financing cost, it will be beneficial to the company's P&L.

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28-06-2018, 06:59 PM.
Post: #184
RE: Courts Asia
Just 3 months ago, CAL sought permission from the note holders for the note covenants to be relaxed. Now, it has decided it no longer needed the money after all.

Since CAL's financing business depends on a readily available supply of cash, now that CAL is returning money to noteholders, it may mean that CAL has decided to gradually unwind the financing business in either Malaysia, Indonesia, or both. Why Malaysia and Indonesia? Because both these business units have poor performance/prospects; higher delinquency on its receivables, and in Malaysia's case, a cap on the interest it can charge.

CAL may have first decided to stay the course in Malaysia/Indonesia financing when it solicited noteholders approval for covenant relaxation in March. It may have just realised how challenging its Malaysian business is when it is unable to price its interest charges at a rate that is appropriate to the customer's credit profile.

Will CAL close its Indonesian operations, again? What will Courts Malaysia's marketing strategy be, without a financing arm?

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