SGX-Listed Grand Banks Yachts Posts Profit
Published: Friday, 05 February 2016
Luxury boat-builder Grand Banks Yachts Limited (The Group) has seen an increase in net profits following the successful addition of Australian-builder Palm Beach Motor Yachts. The company has since seen a positive swing of S$2.8 million in bottom-line as net profit for the July-to-December 2015 period (First Half Fiscal Year 2016) rose to S$1.6 million from a loss of S$1.2 million a year earlier.
(55 Aleutian RP)
The Singapore Exchange-listed company recorded a net profit of S$0.4 million during the second quarter ending December 31, 2015 (2Q FY2016), an increase from S$0.1 million a year earlier.
Despite 2Q FY2016 revenue declining 10.2 per cent to S$11.4 million from S$12.7 million in 2Q FY2015, gross profit rose 26.2 per cent to S$2.8 million from S$2.2 million, while gross profit margin improved to 24.6 per cent from 17.5 per cent over the comparative periods.
The stronger financial performance reflects the Group’s successful integration of operations – including sales, marketing, manufacturing, financial reporting and personnel functions – after it completed the acquisition of Palm Beach Motor Yacht in August 2014.
Grand Banks has adopted a factory-direct sales model, which together with a stronger U.S. dollar, helped to lift the gross profit.
"We are well into restructuring our Malaysian operations, as well as integrating Grand Banks and Palm Beach's manufacturing techniques,” says Grand Banks CEO Mark Richards. “Our new factory-direct sales model has been an excellent move, giving us total control over our sales performance and products. The results have been very positive and with so much still to do, I am excited for the future of the company."
For the first half of FY2016 (1HFY2016), revenue grew 32.5 per cent to S$25.4 million from S$19.2 million a year ago and gross profit rose to S$6.2 million from S$2.8 million in 1H FY2015 while gross profit margin widened to 24.5 per cent from 14.8 per cent, respectively.
As a result, the Group reversed from a loss of S$1.2 million in 1H FY2015 to post a net profit of S$1.6 million for 1H FY2016.
(55 Aleutian RP)
The Group's cash flow from operating activities improved to S$4.6 million for 1H FY2016, compared to cash flow used in operating activities of S$0.1 million a year ago. This was due to net profit for 1H FY2016 and lower working capital. New orders secured led to more customer deposits and hence higher payables while the completion of a yacht at the end of December 2015 led to an increase in receivables.
Payment for the second and final consideration for the acquisition of Palm Beach Motor Yacht was made in the quarter under review. As a result, cash and cash equivalents decreased to S$20.1 million as at December 31 2015 from S$23.2 million as at September 30 2015.
Earnings per share increased to 0.20 cent in 2Q FY2016 from 0.03 cent in 2Q FY2015. Net asset value per share increased marginally to 24.36 cents as at 31 December 2015 from 24.34 cents as at 30 June 2015.
Five new boat orders – which include Grand Banks 44 and Palm Beach 42 – in 2Q FY2016 helped the Group achieve a net order book of S$31.9 million as of the end of December 2015.
Grand Banks' boats were well received in the Fort Lauderdale International Boat Show (Nov 5-9). To accelerate marketing efforts, the Group will continue to participate in major boat shows this year in Miami (Feb 11-15) and Singapore (Apr 7-10).
“Grand Banks has turned the tide and is now charting a new growth phase powered by a clear product roadmap for two world-class boat brands,” says Grand Banks Chairman Heine Askaer-Jensen. “We will strive to increase the order book for both our brands with a view to driving long-term value for shareholders."