Retail Holdings N.V. Announces First Half 2019 Results Including Significant Progress Toward Completing Divestment Program

WILLEMSTAD, Curaçao, Aug. 13, 2019 /PRNewswire/ -- Retail Holdings N.V. (Symbol:  RHDGF) -- Retail Holdings N.V. ("Retail Holdings", together with its subsidiaries and affiliates, the "Company") announced today results for the first half of 2019.

• Results for the period were significantly impacted by the sale, effective March 31, 2019, of the Company's equity in Singer Bangladesh. The sale essentially completes the Company's divestment program initiated in 2015.
• The Company paid a dividend of $8.00 per Share during the 2019 six-month period;
  a $9.00 per Share distribution was paid to shareholders in the first half of 2018. Distributions have totaled $36.75 per Share since initiation of the distribution program in 2007.
• Consolidated revenue from Continuing Operations (only Singer India and the Corporate function) grew 9.9% from prior year to $37.1 million. The after-tax Loss from Continuing Operations for the January – June 2019 period was $0.9 million, compared to a $1.8 million Loss for the prior year period.
• The Profit from Discontinued Operations during the first six months of 2019, including both the profit at Singer Bangladesh for the 2019 period until divestment and the gain on disposal, totaled $42.9 million, compared to a Profit from Discontinued Operations of $5.1 million prior year.
• Total Company Profit for the six-month period ended June 30, 2019 was $42.0 million, compared to a profit of $3.2 million the same period prior year. The profit attributable to Retail Holdings' shareholders was $21.2 million, as compared to an attributable profit of $0.2 million during the first half of 2018.

Commenting on the 2019 first half results, Stephen H. Goodman, Retail Holdings' Chairman, President and CEO, said, "I am extremely pleased by the sale during the first half of 2019 of the Company's remaining equity stake in Singer Bangladesh. The consideration from the sale, $75.0 million, has now all been received, including $3.0 million received in July 2019 reflecting the post-closing adjustments. This sale essentially completes the divestment program initiated by the Company in 2015, including the sale of operations in Bangladesh, Cambodia, Pakistan, Sri Lanka, and Thailand. The only remaining operating asset is the Company's 59.1% stake in Singer India Limited.

"The Company's Corporate cash, including Retail Holdings Corporate, Sewko/Singer Asia Corporate and the $3.0 million received in July 2019, totals $13.2 million ($8.2 million, of which, is attributable to the Retail Holdings' shareholders).

"The Company's challenge going forward is to either divest the remaining Singer India shares and/or to improve the scale and profitability of the ongoing Singer India business, while further reducing Corporate costs, so that the Company's Continuing Operations can shift from a small loss in the first half of 2019 to a profit increasing over time.  Management's first preference is to divest the India shares assuming that this can be achieved at a reasonable valuation, but progress also continues to be made in boosting Revenue, primarily through additional appliance sales, and reducing costs, both at Singer India and in the Corporate functions.

"I encourage all shareholders to read the Retail Holdings complete Summary Semi-Annual Report for the period ended June 30, 2019, which is available at the Corporate/Investor Section of the Retail Holdings' website, www.retailholdings.com, or can be obtained by email, telephone or regular mail request."

Management Summary Discussion and Analysis

The following discussion and analysis should be read with the Condensed Consolidated Interim Financial Statements of the Company for the six-month periods January 1, 2019 - June 30, 2019 and January 1, 2018 – June 30, 2018, and related Notes, pages 5-13 of the Summary Semi-Annual Report.

The financial results for the period, as well as the historic comparables (restated), have been materially impacted by the sale, effective March 31, 2019, of the entire equity of Retail Holdings Bhold B.V., an intermediate subsidiary of the Company, which at that date owned 56.99% of the equity of Singer Bangladesh Limited ("Singer Bangladesh"). As a result of this sale, Singer Bangladesh is included in the results, classified as a Discontinued Operation, for the three months ended March 31, 2019, and for the six months ended June 30, 2019. Continuing Operations only include the results for Singer India Limited ("Singer India"), the Company's only continuing operating company, and Corporate functions.

First Half Results 

Continuing Operations

The Company's consolidated Revenue from Continuing Operations was $37.1 million, for the six months ended June 30, 2019. This compares to consolidated Revenue from Continuing Operations of $33.8 million for the same period in 2018, an increase, as measured in U.S. dollars, of 9.9%. The growth in Revenue largely reflects the growth in the appliance products offering at Singer India. Measured in local currency, Revenue at Singer India grew 17.3% during the first half of 2019, as compared with the same period prior year.

Included in Revenue are royalties from third parties (Australia, Malaysia and Thailand) totaling $350 thousand in the first half of 2019 ($346 thousand in the first half of 2018). Going forward, the Company will only receive third party royalty from Thailand ($192 thousand in the first half of 2018).

Gross profit from Continuing Operations for the six months ended June 30, 2019 was $8.6 million, representing a Gross profit margin of 23.1%, as compared to $7.8 million and a Gross profit margin of 23.2% for the six months ended June 30, 2018.

Selling and administrative expenses ("S&A") from Continuing Operations for the six months ended June 30, 2019 were $9.0 million, representing 24.2% of Revenue, as compared to $9.2 million and 27.3% of Revenue for the six months ended June 30, 2018. The decrease in S&A expenses as a percentage of Revenue in 2019, compared to the same period prior year, reflects an on-going effort to reduce Corporate costs, in light of the substantial drop in the Company's Revenue as operations have been divested. Of the Company's total S&A expenses, $6.9 million reflects S&A expenses at Singer India during the first half of 2019 ($6.5 million in the first half of 2018), and $2.0 million represents S&A expenses at Corporate in the 2019 period ($2.7 million in the 2018 period).

Other expenses, primarily, royalty paid to SVP for the use of the Singer trademark by Singer Asia and Singer India, totaled $0.3 million in both the first half of 2019 and 2018. Royalty is calculated as 0.88% of Revenue.

Results from operating activities from Continuing Operations for the six months ending June 30, 2019 and June 30, 2018 were a loss of $0.5 million and $1.4 million respectively. The reduced loss reflects the increase in Revenue and Gross profit, and the decline in S&A expenses.

Net finance costs from Continuing Operations for the six months ended June 30, 2019 were essentially nil as compared to Net finance income of $0.1 million for the same period in 2018. The swing in net finance costs primarily reflects an increase in interest expense at Singer India as a result of higher borrowings.

The Company's Loss from Continuing Operations before income taxes was $0.6 million for the six months ended June 30, 2019, compared to a Loss of $1.2 million for the same period in 2018. Income tax expense from Continuing Operations for the six-months ended June 30, 2019 and 2018 were $0.3 million and $0.6 million, respectively. For the six months ended June 30, 2019, the Company's Loss from Continuing Operations after tax was $0.9 million compared to a Loss of $1.8 million for the same period in 2018.

Discontinued Operations

Profit from Discontinued Operations, net of tax, for the six-month period ended June 30, 2019 was $42.9 million. Of this amount, $1.6 million represents Profit from the ongoing business operations of Singer Bangladesh for the three-month period January 1 – March 31, 2019. The balance of $41.3 million represents the Gain on the disposal of Retail Holdings Bhold B.V, the entity holding the Company's equity in Singer Bangladesh, effective March 31. 2019. For the six-month period ended June 30, 2018, Profit from Discontinued Operations, net of tax, was $5.1 million, all of which represents Profit at the ongoing business operations of Singer Bangladesh for the six-month period January 1 – June 30, 2019.

Total Company

The Company's total Profit for the period ended June 30, 2019 was $42.0 million, compared to a profit of $3.2 million in the same period prior year. The substantial increase in profit primarily reflects the Gain, in the 2019 period, on the disposal of Retail Holdings Bhold B.V. plus the smaller loss from Continuing Operations,  offset, in part, in the 2018 period, by the higher net Profit at Singer Bangladesh reflecting the longer (six month) ownership period.

The Profit attributable to equity holders of Retail Holdings was $ 21.2 million for the six months ended June 30, 2019, as compared to $0.2 million for the same period prior year. A Profit of $20.8 million is attributable to minority shareholders at the Company and its subsidiaries for the six months ended June 30, 2019, as compared to $3.0 million for the six months ended June 30, 2018. The increase in the percentage of profit attributable to the owners of Retail Holdings, 50.5% in the first half of 2019, as compared to 7.7% in the same period prior year, is due to the fact that no minority shareholders in the operating companies shared in the Gain on disposal of Retail Holdings Bhold B.V. and that period costs at Corporate represented a smaller share in 2019 of the much greater total Company profit.

The Profit attributable to Retail Holdings' shareholders is equivalent to earnings per Share of $4.56 for the six months ended June 30, 2019, as compared to $0.05 per Share for the same period prior year.

About Retail Holdings N.V.

Retail Holdings N.V.is a holding company with one principal asset, a 54.1% equity interest in Sewko Holdings Limited ("Sewko"), which, in turn, indirectly owns 59.9% of the equity of Singer India Limited. Singer India's principal business is the sale of sewing machine and appliances throughout India. It is primarily a wholesale business supplemented by a relatively small number of direct distribution points. Additional financial and other information about  Retail Holdings may be found at the Corporate/Investor section of the Company's website: www.retailholdings.com. Price quotations for the Company's shares are available on the "Pink Sheets" quotation service under the symbol "RHDGF".

For further information, please contact Amy Pappas at 1-914-241-3404.

SOURCE Retail Holdings N.V.

Related Links

http://www.retailholdings.com