Business Description
2nd Chance was listed on the SGX-Sesdaq on 24 January 1997, and upgraded to the Mainboard on 2 March 2004. It started out as a sole proprietorship in 1975, when Mohamed Salleh set up Second Chance Enterprises to engage in the tailoring of men's garments. By 1976, the business had expanded to 3 tailoring shops. However, due to difficulty in expanding the tailoring business further, Second Chance Enterprises decided to switch to retailing of men's ready-to-wear fashion clothes in 1979.
Corporate Goals:
First Lady-- To expand First Lady into the largest retailer & wholesaler of modern Islamic apparel in the region. To grow from 14 outlets in Malaysia as of June 2006, to 100 outlets by June 2012.
Golden Chance-- To maintain our dominance of the gold jewellery business in the domestic Malay market.
2nd Chance Properties-- To continue selective purchases of choice retail properties thereby augmenting our stable source of rental income.
In 1993, the Group opened its goldsmith shop, called Golden Chance Goldsmith. The gold jewellery retail business is currently the main revenue and profit contributor to the Group. In 1996, the Group expanded its gold jewellery retail business into Malaysia.
The Company was incorporated on 7 July 1981 as Indonesian Mercantile Traders (S) Pte Ltd. It changed its name to Second Chance Enterprises Pte Ltd in 1986 and to its present name in 1987 to reflect its change of status to a public limited company.
The Group is principally engaged in the retailing of ready-made wearing apparel, and gold and diamond jewellery, through a network of retail outlets in Singapore and Malaysia. Its 2nd Chance and First Lady outlets retail mainly the 2nd Chance brand of boys and men's clothing, and the First Lady brand of traditional Malay ladies' and girls' clothing respectively, while its Golden Chance outlets retail gold and diamond jewellery. In 1999, it diversified into property investments.
Recent Development
2 Dec 2007- The Founder and present Chairman & CEO of Second Chance Properties Ltd (the “Company”) has outlined a succession plan for the Group to adopt. He wishes to emulate the proven effectiveness of MM Lee Kuan Yew’s own style of succession whereby while still healthy and in good form effect a smooth transition and at the same time continue to play a pivotal role.
1. Under this plan, Dr. Ahmad Magad, the Lead Independent Director, was invited and has accepted the position of Chairman (Non-Executive) of the Group with effect from 1st December 2007. The tenure is for 3 years with re-appointment at the pleasure of the Board. The incumbent remains as CEO.
2. The Deputy Chairman & Deputy CEO, Mr Hasan Marican, has agreed to take up the position of Group CEO for a period of 5 years with effect from 1st July 2009. Mr. Hasan has proven himself beyond any doubt over the last 24 years and is confident in taking the Group to greater heights. Mr. Mohd Salleh will then take up the role of Advisor and Executive Director. He intends to continue playing an active full time role in the Group for many years to come and continue to help navigate it.
3. To further strengthen the Board, Mr Ferus Bakar, Business Manager of the Group, has been promoted and appointed as an Executive Director with effect from 1 December 2007.
Mr. Ferus Bakar joined the Group on 1st July 2005 as Business Manager. He is responsible for purchasing, A&P & assisting Chairman & CEO in human resource activities and general management of business for the Group. Prior to joining the Group, he was an Associate Account Director with MediacorpTV12. He has accumulated 13years of Retail, Hospitality, Food & Beverage and Media industry experience in managerial capacity.
29 August 2007- FY June 2007 Results Highlights
Revenue: $48.17m (+13%)
Net profits after tax: $18.3m (+74%)
Basic EPS: 6.18cents
Net Operating Cashflow: $6.1m
Dividend: 2.7cents nett
23 March 2007 - Second Chance Properties Ltd announced that its subsidiary, Super Chance Properties Pte Ltd, has signed a sale and purchase agreement to buy the following unit for investment purpose. Details of the transaction are as follow:
Address of property : Block 12 Haig Road #01-323 Singapore 430012
Tenure of property : Leasehold (82 years from 1 July 1993)
Size of property : 393 sq metres
Purchase price : S$6,820,000.00
Purpose of purchase : Investment
Deposit and Date paid : S$358,050.00 inclusive of GST paid on 23 March 2007
Rental income per month : S$40,000.00 excluding GST and service charges
Expected date of completion : 13 July 2007
Purchaser : Super Chance Properties Pte Ltd
18 Aug 2006...
Record Net Profit for fourth consecutive year
Higher and Increasing Dividend for the next Three Years
First Lady to Expand to 100 stores in Malaysia
FY 2006 Performance
In 2006, Second Chance Properties Ltd generated total revenue of $42.49 million, which is 8.68% more than the prior year. The Group reported net profit after tax of $10.513 million, which is 4.86% more from FY 2005.
The net cash generated from operating activities was $7.38 million as compared to $6.3 million in the prior year. The Group maintained a strong balance sheet and healthy financial position at the end of 2006 with gearing lowered to 0.66.
Dividend
Due to the strong performance and our optimistic outlook for the Group, the Directors are recommending an increase in the dividend to 3.0 cents per ordinary share less Singapore tax of 20% or 2.4 cents after tax for this financial year.
For the next two financial years that is June 2007 and June 2008, the Directors will be recommending a higher dividend payout of 2.7cents and 3.0cents after tax respectively.
Barring any change in circumstances, the Directors intend to continue with its high dividend policy for future years.
Future Growth
The successful expansion of First Lady in Malaysia will provide a new engine of growth for the Group. At present, we have fourteen (14) highly profitable stores in peninsula Malaysia making us the dominant and unrivalled market leader. The plan now is to expand our chain of stores to one hundred (100) within a period of five to six years; in all cities and major towns throughout both east & west Malaysia.
The increase in interest rates and higher property prices has resulted in much lower real net returns and higher risk, making good buys difficult to find. There was one property investment of $4.59 million made in FY 2006. This does not mean that our growth in property investment will stop. Our strong profits and good cash flow is reducing our debt and with much lower gearing, we are well positioned to re-enter and take advantage of any sudden negative events affecting the property market.
Outlook for FY 2007
The increase in property prices and rentals is expected to continue with the robust economy. This augurs well for our investment properties purchased earlier during the years of economic uncertainty.
Our retail business will continue to do well. The gold business is expected to maintain its profitability, while the apparel division with the strong expansion of First lady in Malaysia will contribute higher profits.
With all these positive factors, the outlook for this year has never been as good.
2nd Chance has a good track record of maintaining profitability, often trades below NAV, and pays a high dividend yield.
WS Dividend Rank :
Consecutive Years Paying Div : 2
Consecutive Years Increase Div : 2
One-Year Total Return : 54 %
REVENUE/EARNINGS DATA
Revenue (Million S$ )
1Q 2Q 3Q 4Q Year
2007 - - - - 48.2
2006 - - - - 42.5
2005 - - - - 39.1
2004 - - - - 36.1
Earnings Per Share ( S$ )
2007 - - - - 0.0618
2006 - - - - 0.0400
2005 - - - - 0.0520
2004 - - - - 0.0480
Dividend Data (cents - SGD )
Year Interim Final Total Share Bonus
2006 - 0.0240 0.0240
2005 - 0.0200 0.0200
2007 - - 0.0270
Officers
Ms. Joharabee Bte Kadir Maideen Saiboo Marican: GM First Lady
Safie Hussain: Field Mgr, Men's Stores
J. Raj Mohamed: Accounts Mgr
Ms. Geetha Padmanabhan: Finance Mgr
Ferus Baker: Business Mgr
Board of Directors
Mohamed Salleh Marican: Adviser & Executive Director
Hasan Marican: Group CEO (effective 1 July 2009)
Dev Pisharody: Executive Director
Ms. Radiah Maricar: Executive Director
Ahmad Bin Mohamed Magad: Non-Executive Chairman
David Tan Chao Hsiung: Independent Director
Paul Tan Lye Heng: Independent Director
Ferus Bakar: Executive Director
Founded: 1975
Stockholders:2,371 (at 30 Sep 2005)
Largest Stockholders (Sep 2005)
Mohamed Selleh Marican, Director: 58%
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