Grand Banks Yachts Posts Third Consecutive Profitable Quarter
Published: Monday, 09 May 2016
SGX Mainboard-listed Grand Banks Yachts Limited (the Group) announced on May 9 it posted a profit for its third quarter and nine months ended March 31 2016 after successful integration of operations at its two brands. This represents the Group's third consecutive profitable quarter.
The luxury yacht maker – which owns the Grand Banks and Palm Beach Motor Yacht brands – turned in a 3Q 2016 net profit of S$0.4 million as revenue more than doubled to S$17.3 million from S$6.3 million for the same quarter last year (3Q 2015), when it incurred a net loss of S$1.1 million.
(Photos: Grand Banks Yachts)
The rise in revenue came as more boats achieved construction milestones for revenue recognition and sale of four trade-in yachts. With the higher revenue, gross profit rose to S$2.4 million in 3Q 2016 from S$0.5 million in 3Q 2015, while gross profit margin increased from 7.9% to 14.1%. Excluding the sale of the four trade-in yachts, gross profit margin would have increased to 18.2% in 3Q 2016.
In 3Q 2016, the Group received orders for eight new boats, including new designs such as the Grand Banks 44, Grand Banks 60 and the Palm Beach 42. This pushed up its net order book to a seven-year high of S$40.0 million as at March 31 2016. In March alone, the Group secured S$16.3 million worth of new orders following the Miami International Boat Show in February.
Earnings per share for 3Q 2016 came to 0.20 cent compared to a loss per share of 0.62 cent for 3Q 2015. Net asset value per share as at March 31 2016 rose to 25.12 cents from 24.34 cents as at June 30 2015. The Group ended the quarter with cash and cash equivalents of S$14.7 million.
For the nine months to March 31 2016, the Group made a net profit of S$2.0 million, reversing a loss of S$2.4 million for the same period in 2015. The turnaround came on the back of various initiatives undertaken by the Group after it acquired Australia-based Palm Beach Motor Yacht Co Pty Ltd in 2014. These include a factory-direct sales model, increased marketing efforts, and enhanced manufacturing processes.
In April 2016, the Group showcased the new Palm Beach 42 yacht, alongside the Palm Beach 65, at the Singapore Yacht Show. This marked the first time the Palm Beach brand made its debut in Asia.
Chief Executive Officer of Grand Banks Mark Richards says, “The strong order book reflects the demand for our new yacht designs. We are excited to have showcased the Palm Beach brand in Singapore last month and looking forward to the upcoming Sanctuary Cove Boat Show in May 2016.”
Chairman of Grand Banks Heine Askaer-Jensen says, “The results underscore the success of our efforts to integrate the operations of two world-class yacht brands. We will continue to work towards improving profitability and enhance shareholder value in the long run.”
As announced on April 13 2016, the Group signed a 30-year land lease renewal for its manufacturing yard in Pasir Gudang, Johor, Malaysia. The new lease expires on October 29 2052, allowing the Group to continue operating many years from now. 30% of the total renewal consideration of RM18.3 million (approximately S$6.2 million) has been paid. The remaining 70% will be paid by June 21 2016 using internal funds and bank borrowings.
Barring any unforeseen circumstances, the Board of Directors expects the Group’s FY2016 performance to improve significantly compared to FY2015, when it incurred a net loss of S$4.8 million.