In order to reward shareholders who have given strong support over the years, the Company intends to increase dividend payment if the Group has sufficient cash flow.
“The Board of Directors has approved a plan that aims to pay at least 50% of the profit after tax as dividends to shareholders for the next three years” said Mr Loo.
no wonder it hit 60 cents, if they make 5 cents this year, then its min 2.5 cents dividend pay out.. I think 3 cents is possible
We have converted one of our Challenger Mini stores in Funan to Musica concept store in August 2013. Musica concept store focuses on music related products like speakers, headsets, tablets and other accessories. We will open a new Musica concept store in Westgate in December 2013.
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In addition, we will be converting one of our Challenger Mini stores in Funan to Valore concept store and opening three new Valore concept stores in AMK Hub, Clementi Mall and Westgate in December 2013. Valore concept stores carry our Valore branded, trendy and lifestyle products.
Mr. Loo Leong Thye, the Chief Executive of the Company, said, “We grew our revenue and profit for the nine months despite the tough retail environment. We are excited to go into Q4 which is traditionally a good quarter for retailers like us.”
To further increase sales and profits, the management has targeted to open the Valore concept stores in November and December of 2013. “In addition to the eight new Challenger stores opened in Singapore this year, in the next two months, we will be opening another three new Valore concept stores which carry mainly our Valore brand products,” said Mr Loo.
- GPM continue to deteriorate, from 18.9% in FY12 to 18.1% in 9 months of FY13. The COGS continue is an issue.
- NPM is 4.3% in 9 months of FY13, versus 4.8% in FY12. The management able to cushion some of pressure from COGS, but I doubt they can do any further.
- Cash cycle is longer, mainly due to shorter payable days. Suppliers were pushing for shorter credit period.
May be a good reason to shift focus to Valore products. Will it work? I am yet to visit any of the Valore shop.
(08-11-2013, 09:40 PM)CityFarmer Wrote: A glimpse on the report, and few points observed
- GPM continue to deteriorate, from 18.9% in FY12 to 18.1% in 9 months of FY13. The COGS continue is an issue.
- NPM is 4.3% in 9 months of FY13, versus 4.8% in FY12. The management able to cushion some of pressure from COGS, but I doubt they can do any further.
- Cash cycle is longer, mainly due to shorter payable days. Suppliers were pushing for shorter credit period.
May be a good reason to shift focus to Valore products. Will it work? I am yet to visit any of the Valore shop.
(vested)
Seems like the management is pinning alot on the new Musica and Valore concept stores. I have not been to one yet. I will probably visit their new stores when I check out Westgate Mall in December.
Brick and mortar shops have been on the drop ever since e-commerce sites gain more popularity. I think this is the reason why Challenger is selling more accessories.
I was talking to a friend the other day and we conclude that there is currently nothing these retailers can stop the shoppers from testing their products and then going back home to purchase it from Amazon. I could be wrong but so far, I think two lines of products have a chance to withstand the threat of e-commerce. The first line will be mobile phones. I have not seen a surge of shoppers purchasing mobile phones online mainly because these people either need to re-contract their existing line or to purchase a new one. You don't get such services in Amazon or at least there is no existing infrastructure system which reach a critical mass to support it. At the end of the day, you still need to go back to the telcos.
The second line of products will be IT accessories and there are two reasons why I think they are relatively more resistant to e-commerce. First, there is lesser economics of savings when you purchase electronic accessories online. The value is too small to spread your shipping cost. You can compile your friends' purchases together but there is too much hassle in doing it and not all of your friends may need to buy an accessory at the same time. In the end, it will be easier to purchase it directly from an IT shop. Secondly, you don't plan in advance when you purchase an IT accessory. It is often the case where you buy it when you need it. This contrast against a laptop or desktop where you could plan 6 months before to purchase it and have ample time to look out for the best deal. So when one buys a keyboard, external HDD or a headphone, they won't want to wait a week or two for the online shipment to arrive.
So with the above, I reckon this could be the reason why Challenger is moving towards their Valore Concept. Question is how well are they able to execute it. Will this expand margin or dilute margin? If it is the latter, will there be enough sales volume to justify better asset turnover? I have not analyze deeper to have a good picture but sales value is small for accessories and you won't want to own a large store just to sell accessories. I think moving forward, there will be more downsizing in Challenger outlets and we are already seeing that.
"Criticism is the fertilizer of learning." - Sir John Templeton
(04-01-2014, 11:07 AM)dzwm87 Wrote: Brick and mortar shops have been on the drop ever since e-commerce sites gain more popularity. I think this is the reason why Challenger is selling more accessories.
FYI, a focus on accessories is the long term strategy of Challenger Tech, long dated back to 2008 at least. It was the focus of Mr. Loo Leong Thye, the CEO then. It is one of the key reasons for me to stay vested. The recent change is to shift its focus from suppliers' brands only, to both suppliers' and Valore's brands, IMO.
(04-01-2014, 11:07 AM)dzwm87 Wrote: I was talking to a friend the other day and we conclude that there is currently nothing these retailers can stop the shoppers from testing their products and then going back home to purchase it from Amazon. I could be wrong but so far, I think two lines of products have a chance to withstand the threat of e-commerce. The first line will be mobile phones. I have not seen a surge of shoppers purchasing mobile phones online mainly because these people either need to re-contract their existing line or to purchase a new one. You don't get such services in Amazon or at least there is no existing infrastructure system which reach a critical mass to support it. At the end of the day, you still need to go back to the telcos.
The second line of products will be IT accessories and there are two reasons why I think they are relatively more resistant to e-commerce. First, there is lesser economics of savings when you purchase electronic accessories online. The value is too small to spread your shipping cost. You can compile your friends' purchases together but there is too much hassle in doing it and not all of your friends may need to buy an accessory at the same time. In the end, it will be easier to purchase it directly from an IT shop. Secondly, you don't plan in advance when you purchase an IT accessory. It is often the case where you buy it when you need it. This contrast against a laptop or desktop where you could plan 6 months before to purchase it and have ample time to look out for the best deal. So when one buys a keyboard, external HDD or a headphone, they won't want to wait a week or two for the online shipment to arrive.
So with the above, I reckon this could be the reason why Challenger is moving towards their Valore Concept. Question is how well are they able to execute it. Will this expand margin or dilute margin? If it is the latter, will there be enough sales volume to justify better asset turnover? I have not analyze deeper to have a good picture but sales value is small for accessories and you won't want to own a large store just to sell accessories. I think moving forward, there will be more downsizing in Challenger outlets and we are already seeing that.
I reckon the motivation is to maintain or improve the gross margin. The gross margin has been deteriorated since 2011. I do agree execution is critical. Let's see the result on next few quarters.
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