Singer records 11% increase in PAT | Sunday Observer

Singer records 11% increase in PAT

The Singer Group reported Full Year (FY) 2019/20 consolidated revenue of Rs. 55 billion with an 11% rise in Profit after Tax (PAT) despite the ongoing challenging business environment.

The Group’s consolidated gross profit for the year increased by 2% to Rs. 16.4 billion and at the Company level, gross profit increased by 6% to Rs. 13 billion.

Consolidated Profit before Tax (PBT) for the FY 2019/20 is recorded at Rs. 611 million which is a decrease of 9% from the previous year.

Consolidated PAT of Rs. 427 million showcased a growth of 11% compared to Rs. 386 million during the previous year. The Company also recorded a net PAT of Rs. 13 million, compared to Rs. 140 million achieved last year. The Group’s total comprehensive income for the year is reported at Rs. 449 million.

Singer Group revenues were adversely impacted mainly by the April 19 Easter Sunday Attack and it’s prolonged impact in the economy, mobile phones sales drop due to US / China restrictions, and the recent island wide shut down due to the Covid 19 pandemic spread.  Despite a decline in revenues, consolidated operating profit recorded a growth of 3% to Rs.4.1 billion and at Company level, operating profit had a growth of 17% to Rs. 2.8 billion reflecting wider gross profit margins and improved cost efficiencies. 

The improvements in gross profits reflects the Group’s timely decisions in product margin management and well balanced product marketing mix, continued growth in hire-purchase interest income and ongoing emphasis on streamlining processes. Accordingly, the consolidated gross profit margin was raised to 30% on a cumulative basis from 27.5% in the previous year.

Group administration and selling expenses had witnessed a marginal 1% decrease compared to the previous year with Company, selling and administration expenses also decreased by 2%.

Group and Company net finance cost increased by 6% and 28% respectively in comparison to the previous year mainly due to recording of interest on lease liabilities as per the implementation of the new SLFRS 16 accounting standard.

Excluding interest on lease liabilities the Group’s net finance cost decreased by 15% while the Company reported a marginal 1% increase. Focused efforts towards effective working capital management coupled with the gradual decline in interest rates enabled the Group to record a 15% reduction in net finance costs. This is excluding the IFRS 16 impact.

Following the spread of the global pandemic of the Covid-19 in Sri Lanka and resultant lockdown and curfew, the Group/Company retail and manufacturing operations were adversely affected from March 15 to May 10, 2020. The Group expects retail operation to be normalized in Q2 (FY 20/21) onwards.