Courts Asia

[CityFarmer]

Base on recent move of refurbishing their existing stores, and the new megastore at Tampines, will the expense go up, and further depresses its margin?

Let's see on their next quarter report.

Mega transformation for Courts Tampines

Courts is unveiling its new-look Megastore at Tampines today which will feature a number of firsts for Singapore. At the Augmented Reality 3D Sound Box, customers will be able to see how the latest headphones suit them through an interactive screen that superimposes an image of their choice of headset onto their own real-time picture. The WizKids play area will give children the chance to try out iPads and game consoles, while Courts Connect offers mobile, broadband and TV services from the three major telecoms providers so that customers can get all the best deals under one roof. Photo Courts

- TODAYonline

http://www.todayonline.com/Business/EDC1...s-Tampines

[Nick]

Courts 'well-placed for 2013'
Near full employment is supporting the retail industry in Singapore, says firm's CEO
by David Bottomley 04:45 AM Dec 27, 2012

www.kfc1973-stock.blogspot.sg/2012/12/courts-well-placed-for-2013.html [Article]

(Not Vested)

[felixleong]

   

any of u guys looked at court's latest Q3 results?
Attached is screen shot of it

on paper it looks like they did very very well
revenues +9% and net profits +20%!

how come they are posting results so much better than pertama?(harvey norman)

I looked deeper and realized the extra profits came from their 'other income'
which is mostly interest income

I'm not too sure about their business model, I wonder if this interest income is sustainable or not.

[felixleong]

NEWS RELEASE
COURTS ASIA DELIVERS SECOND QUARTER OF GROWTH POST-LISTING
- Sales boosted mainly by the opening of new stores, online sales and re-launches of stores
- Expanding presence in western region of Singapore and online
Singapore, February 14, 2013 – Newly Mainboard-listed Courts Asia Limited (“Courts Asia” and together with its subsidiaries, “the Group”) (阁室亚洲有限公司), one of Asia’s leading electrical, IT and furniture retailers, delivered a second quarter of growth post-listing.
Net profit rose 21.6% to S$6.2 million for the three months ended December 31, 2012 (“3Q 2013”), compared to S$5.1 million in the last corresponding period (“3Q 2012”). This was achieved on the back of year-on-year sales growth of 9.4%, which increased to S$195.5 million in 3Q 2013 from S$178.7 million in 3Q 2012. In tandem with higher Group revenue, gross profit in 3Q 2013 increased by 6.0% to S$57.8 million. Gross profit margin remained at a healthy level of 29.6%, despite a marginal dip against the last quarter.

[CityFarmer]

any of u guys looked at court's latest Q3 results?
Attached is screen shot of it

on paper it looks like they did very very well
revenues +9% and net profits +20%!

how come they are posting results so much better than pertama?(harvey norman)

I looked deeper and realized the extra profits came from their 'other income'
which is mostly interest income

I'm not too sure about their business model, I wonder if this interest income is sustainable or not.

I purchased an electrical product from Courts recently, and found that the promotion (e.g. lucky draw etc) is only for installment purchase, not for cash payment.

Courts is encouraging installment payment and "milking" its customer by interest charged

[felixleong]

Ya lor, this is what I noticed also

when customer take the installment payment for a purchase of say a TV
courts asia gets to book the full revenue and profits immediately right?
if the customer defaults on the installment then they will write off as a loss

please correct me if I am wrong

this method seems very similiar to the US retail market, where retailer realizing selling credit is better busy then selling their actual products, after the credit bubble burst, major retailers like best buy posted poor results

[CityFarmer]

The company announced that the site of its first “big-box” in Indonesia will be located in Bekasi, eastern Jakarta. Scheduled for opening in 2014, the approximately 140,000-square feet, two-storey megastore will be the Group’s largest store to date once it is operational. With a population of more than 2.4 million1, Bekasi is Indonesia’s most populated suburb and serves as a bedroom community for Jakarta. Even more strategically, the store will be located in the biggest development area of Bekasi, Kota Harapan Indah, which is already home to major big-box retailers such as Carrefour and Giant. The openings of more big-box retailers, as well as a new shopping mall, are in the pipeline for the shopping strip.

http://info.sgx.com/webcoranncatth.nsf/V...20046ABFA/$file/CourtsAsia_IndoStore.pdf?openelement

The Indonesia venture started. Let's see the result after 2014. I assume the key business still the credit service, instead of selling consumer products. Credit service is well-received in M'sia, not sure it is the same for Indonesia

[specuvestor]

I have to admit that Courts Asia has performed way better than I expected after the initial dip. They are a consumer credit company that sells consumer goods

Malaysia business is not very profitable. I guess it is a function of the credit write-offs. Indonesia could be interesting if they manage the credit process properly I guess.

[CityFarmer]

I have to admit that Courts Asia has performed way better than I expected after the initial dip. They are a consumer credit company that sells consumer goods

Malaysia business is not very profitable. I guess it is a function of the credit write-offs. Indonesia could be interesting if they manage the credit process properly I guess.

In gross profit margin, M'sia segment is much better than Singapore segment. Base on info from IPO prospectus, in FY2012, gross margin of Singapore is 23% versus 50% in M'sia. I assume it is due to higher mix of credit service in revenue for M'sia segment.

What source of info lead to your conclusion?

[specuvestor]

Hi Cityfarmer

Please refer to my 4 months' old post #35 below. GM for Malaysia is higher but that is just one aspect. We have to take into account credit cost and sales psf. We also know that this is their 2nd venture into Indonesia.

In any case in the long run the market is a weighing machine. Many "voting" stocks have risen past 2 months, and Courts being an IPO stock is deemed as little technical resistance. So we'll see if this is another Challenger

IIRC when I met Courts a year ago, (which they subsequently aborted the listing), their main profit generator is actually Courts Megastore Tampines, which is 1/3 their sales and half their profit, or something like that. They also closed down a number of stores that were unprofitable. IIRC Singapore sales per square foot is like 10X of the neighbour. Trace back the history and not difficult to understand the turnaround. I haven't read the new prospectus, do correct me if I am wrong.