From the 1H FY2017 financial results below, we can see how much the current economic downturn has hurt the luxury business. On a positive note, the Group’s balance sheet remains robust with consolidated net assets of $444.2 million with cash and cash equivalents of $85.3 million.
| Unaudited 1H FY2017 Results
For the Period ended: |
3 Sep ’16
$’000 |
30 Sep ’15
$’000 |
Change % |
| Revenue | 311,298 | 334,659 | (7%) |
| Profit Before Taxation | 21,734 | 25,049 | (13%) |
| Profit After Taxation | 16,885 | 20,722 | (19%) |
| Earnings per Share (cents) | 2.34 | 2.85 | (18%) |
The Hour Glass has businesses in Singapore, Hong Kong, Japan, Australia, Thailand and Malaysia.
Thailand Business
With the recent passing of Thailand’s King, Thailand enters a prolonged period of mourning, curtailing and luxury consumption. This will have an impact on the Group’s Thai associates. There are currently 9 boutiques in Thailand.
Current Dividend Yield
At current closing price of S$0.625, this translates to a dividend yield of 3.2%. The Hour Glass is still not a fantastic dividend stock.
If you really love The Hour Glass
The total number of shares issued in the market is 705,011,880. Based on the consolidated net assets of $444.2 million, the net asset value is S$0.63 per share. At current closing price of S$0.625, The Hour Glass is trading at fair value.
Currently, The Hour Glass makes up 4% of my stock portfolio. Estimated 2.5% dividend yield. Vested for dividend + growth.