LONDON (Alliance News) - New Trend Lifestyle Group PLC saw its share drop almost 20% Monday after it said it swung to a loss in the first half of 2014, hit by a near 18% fall in revenue and higher administrative expenses.
The Singapore-based Feng Shui products and services company reported a pretax loss of SGD863,000 for the six months to June 30, compared with the SGD543,000 pretax profit it reported in the first half of 2013.
The company said it was hit by a near 18% drop in overall revenue to SGD4.6 million, down from SGD5.6 million a year earlier, while like-for-like sales in Singapore declined almost 25% to SGD3.6 million. It said sales of services were particularly badly hit, reflecting the reduced number of house moves and lower disposable income.
Administrative expenses also increased to SGD4.4 million, up from SGD3.3 million last year.
"A depressed retail environment in Singapore, coupled with the slower than intended progress in China has resulted in a poor financial performance over the last six months. Management are working hard to stem the losses and have achieved useful reductions in discretionary costs. However, many of the costs, such as rent, are fixed in the short- to medium-term," said Chairman Robert Goddard in a statement.
The company said its net cash outflow from operations increased to SGD1.5 million, having been only SGD186,000 last year.
"Planning is underway in Singapore to raise volume and profitability by evolving the business model so that there will be fewer but larger stores," Goddard said.
"In China, we are in discussions with potential franchisees and for the purchase of a complementary retail chain of stores. [The company] is also aiming to cooperate with lotteries in selecting 'lucky' numbers and negotiating to provide a range of services to a number of temples," he added.
New Trend Lifestyle shares were down 19% at 5.75 pence Monday morning.
By Rowena Harris-Doughty; rowenaharrisdoughty@alliancenews.com; @rharrisdoughty
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