FJ Benjamin FY09 Q2 result

FJ Benjamin just announced the Q2 result for FY09.

Turnover -10%
Gross profit -14%
Other income -66%
Rental +10%
Operating profit -53%

>> Retailer seems to be caught in situation where there is plunge of sales but rental keep going up.

Forex loss of 2,345,000
Net profit -93% to 611,000 only

>> The luxury sector really get hit when economy turns bad.

Current liabilities (in '000)
Trade and other creditors 74,183
Bank borrowing 58,358

Debt repayable within one year 58,389
Minus cash on hand, outstanding debt 37,392

Cash before working capital 3,500
Cash used in operation 13,332
Cash at end of period 11,150

>> Cash are locked out in two items - increase in debtors and stocks. The negative cashflow is really a cause of concern.

EPS for Q2 0.11

According to explanation, profit -53% plus unrealised non-cash forex loss of 2.3mil for trade payable and other balance. At current economic situation, the forex fluctuation is going to be constant issue. Margin decreased slightly as promotional activities increased. The group business affected by the downturn, as consumer cut back spending, and promotional activities increased. Revenue in China -35%.

It is really not time for retailer, many thought that luxury sector should be less affected, but it is not. The negative cashflow is really a big concern to me, especially time is bad now. Assume EPS remain same across quarter, full year EPS would be 0.44. But this figure is not so meaningful, since the business would keep deterior affected by consumer willingness to spend.