Kingsmen Q3 profit falls 84% on softer demand from high-end retailers
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Kingsmen Creatives’ net profit fell 83.6 per cent in third quarter as the retail and corporate interiors business slowed for the maker of physical displays.
Kingsmen posted earnings of S$566,000, or 0.29 Singapore cent per share, for the three months ended September. Nine-month profit haved to S$4.4 million, or 2.26 Singapore cents per share. Kingsmen shares did not trade on Thursday, but were bid at 77.5 Singapore cents and offered at 78.5 Singapore cents at the close.
Revenue fell 11.8 per cent to S$76 million during the quarter as sales from retail and corporate interiors dropped 10.2 per cent to S$37.9 million amid soft demand from the high-end luxury retail segment. The affordable-luxury and travel retail segment, however, continues to provide demand.
The exhibitions and museums business also saw revenue decline by 7.8 per cent to S$30.7 million.
Kingsmen guided for demand in the high-end luxury retail segment to remain soft. The company had contracts worth S$348 million as at Oct 31, 2015, of which about S$305 million was expected to be recognised in 2015.
Questions & Answers
Q.What caused the significant drop in Kingsmen's third-quarter profit?
What caused the significant drop in Kingsmen's third-quarter profit?
The main reason for the profit decline was a slowdown in the retail and corporate interiors business. This was due to softer demand specifically from the high-end luxury retail segment.
Q.Which business segments experienced a decrease in revenue during the third quarter?
Which business segments experienced a decrease in revenue during the third quarter?
Sales from the retail and corporate interiors business dropped, largely due to reduced demand from high-end luxury retailers. The exhibitions and museums business also saw a decline in its revenue.
Q.What parts of the market are still performing well for Kingsmen?
What parts of the market are still performing well for Kingsmen?
Despite the overall slowdown, the affordable-luxury and travel retail segments continue to generate demand for Kingsmen. This suggests these areas are more resilient to the current market conditions.
Q.How much of Kingsmen's contracts were expected to be recognised in 2015?
How much of Kingsmen's contracts were expected to be recognised in 2015?
Out of the total S$348 million worth of contracts the company held as of 31 October 2015, approximately S$305 million was expected to be recognised within the 2015 financial year.