Saturday, May 15, 2010

Singer surpasses full year 2009 profits in 1Q 2010

 In a significant turnaround, Singer (Sri Lanka) Plc has surpassed the 2009 profits within the first quarter of this year itself.
Group and company net profit of Rs. 170.6 million and Rs. 141.3 million respectively is higher than the full year 2009 figures of Rs. 112 million and Rs. 80.5 million. Singer described 2009 as the 'most turbulent' in its history and the low profit level was in comparison to Rs. 165.4 million net profit (Group) and Rs. 446.5 million (Company) in 2008.

Singer Chairman Hemaka Amarasuriya said that the first quarter results confirm the Company's emergence from one of the worst downturns in corporate history as a comparatively stronger business entity. The turnaround was successfully engineered by Singer staff, he added.

"Our most important asset is 'human capital' and it was the commitment of our employees at every level of the corporate ladder that helped to overcome adversities of 2009 and paved the way for strong first quarter results," Amarasuriya said in his review to shareholders accompanying interim results.

"Sustainability is portrayed by exceptional April results following closure of first quarter reports and with the home economy poised to grow quarter on quarter this upswing is expected to continue unabated with an inspired management confident of overcoming market forces," the Singer Chief added.

In the first quarter, the Company's traditional retail channel 'Singer Plus' dominated specifically the rural markets, continuously exceeded sales forecast while Singer Wholesale channel selling to the trade had achieved substantially higher sales over the previous year. Group revenue had grown by 20% in the first quarter.

Several factors had further helped the turnaround. One was a top down sales push that was unleashed with relentless aggression and another was consistent brand building in the mass media.

Special focus on the rebranded hire purchase scheme 'Sahanaya,' aggressive promotions and continuous improvement in supply chain delivery via an integrated all encompassing ERP system, revival of channel productivity in 'Singer Plus' and 'Sisil World' by closure of loss making sales outlets and opening retail stores in newly-emerging corridors of the north and east were some of other contributory factors for the revival in the first quarter.

Amarasuriya said the Singer management continues to hold a tight leash on expenses in the aftermath of downturn. "Experience gained in minimising cost wastage will not be easily lost on our operational teams. By a combination of actions we were able to maximise the impact of new money supply flows from expenditure on elections significantly increasing the market shares and shaping the company towards market dominance," the Singer Chief added.

He said that the 2010 second quarter would see the launch of Singer laptops with accessible payment schemes and promise of service delivery in partnership with Microsoft and Intel with a pledge of a laptop for everybody.

Re-entering the agro market where Singer were once among the market leaders, with tractors and generators, according to Amarasuriya, will enable the Company to reach out to a niche in the developing economies of the north and east.

Another significant event is the portrayal of the company's own 'Unic' brand as a re-emerging electronics player with a brand extension to DVD player, ideally suited for the trade channel where budget prices are prevailing.

"These launches are aimed at sustaining the vibrancy of a reviving market with GDP estimated to grow at 6% when compared to a low of 3.5% in 2009," the Chairman said.

 "With the necessary programmes in place and the motivational levels of our staff at a new high we estimate second quarter performance to better forecast and prior year," added Amarasuriya, who steps down as CEO in June this year.

Shareholders were also briefed about the changing the brand name of Singer's furniture channel from 'Modern Homes' to 'Singer Homes,' which he identified as a significant event in the market calendar.

"Brand changes are far reaching and need to be entered into after protracted research. A response of acclamation from our customer base and increasing footfall are the initially positive reactions to a far reaching change," Amarasuriya added.

One of the most admired companies, Singer, was voted the 'People's Brand of the Year' for an unprecedented fifth consecutive year by the annual AC Nielsen/SLIM poll. Concurrently Singer received a 'AAA' brand evaluation rating from Brand Finance International, perching Singer on top and ahead of all other brands in the home market.

"This will motivate our marketing and sales teams to drive markets with fresh creativity and innovation in the months ahead. While some of our major categories such as 'sewing' and 'refrigerators' consistently exceed the 50% market share threshold, we will now target to increase our market share of the overall household durables market from 35% to 40% as a way forward towards market dominance," Singer Chief Amarasuriya said.

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