Brook Crompton Holdings Ltd. – 1H 2025 Financial Results Analysis
Brook Crompton Holdings Ltd., a listed distributor of electric motors, released its unaudited first half-year financial statement and dividend announcement for the six months ended 30 June 2025. This article summarizes key financial metrics, highlights business developments, and discusses the outlook based solely on the company’s official reporting.
Key Financial Metrics and Comparisons
| Metric |
1H 2025 |
2H 2024 |
1H 2024 |
YoY Change |
QoQ Change |
| Revenue (S\$’000) |
30,304 |
31,763 |
31,763 |
-4.6% |
-4.6% |
| Gross Profit (S\$’000) |
9,093 |
9,080 |
9,080 |
+0.1% |
+0.1% |
| Profit before Tax (S\$’000) |
1,947 |
2,241 |
2,241 |
-13.1% |
-13.1% |
| Net Profit (S\$’000) |
1,444 |
1,737 |
1,737 |
-16.9% |
-16.9% |
| EPS (Basic, SGD cents) |
4.75 |
4.92 |
4.92 |
-3.5% |
-3.5% |
| Dividend per Share |
– |
– |
– |
No dividend |
No dividend |
| Net Asset Value per Share (SGD cents) |
134.5 |
133.3 |
90.3 |
+48.9% |
+0.9% |
Historical Performance Trends
- Revenue: Declined by 4.6% year-on-year, primarily due to lower sales in the UK, US, Australia, and Italy. The Asia Pacific market showed moderate growth amid external challenges.
- Profitability: Gross profit remained steady (+0.1%), but profit before tax and net profit both declined significantly (-13.1% and -16.9% YoY, respectively), reflecting higher operating costs and reduced other income.
- Expenses: Distribution and marketing expenses increased 3.9%, attributed to higher marketing and travel costs. Administrative expenses fell by 1.4%, mainly from reduced consultancy and IT spending.
- Net Asset Value: Improved marginally from the end of 2024, reflecting retained earnings despite lower profits.
Segment Performance
- United Kingdom & Continental Europe: Revenue declined; segment profit before tax dropped due to lower sales and increased costs.
- North America: Despite tariff challenges, the US business saw 3% year-on-year growth due to strong customer engagement and OEM sales.
- Asia Pacific: Moderate growth with increased focus on service and maintenance offerings through a new subsidiary.
- Italy: Faced aggressive price competition and revenue challenges, with management working on supplier negotiations.
Balance Sheet and Cash Flow Highlights
- Inventories: Up 13% to S\$29.4 million, reflecting proactive stock replenishment in the US (to avoid new tariffs) and in the UK for 2025 sales forecasts.
- Receivables: Down 4.1% to S\$16.3 million, due to lower sales late in the period. Only a small proportion of receivables are overdue.
- Cash & Cash Equivalents: Increased to S\$23.2 million, driven by collections from customers and slower supplier payments.
- Operating Cash Flow: Fell to S\$2.1 million (from S\$4.5 million in 1H 2024), mainly due to inventory build-up.
- Capital Expenditure: Lower at S\$0.15 million (vs. S\$0.5 million 1H 2024), resulting in positive investing cash flow.
- Financing Activities: Outflow of S\$1.3 million, with no new capital contributions from non-controlling interests (previous period: S\$1.47 million inflow).
Exceptional Items and Related-Party Transactions
- Tariffs and Supply Chain: The group took action to mitigate the impact of new US tariffs by adjusting supply chain and inventory strategies.
- Related-Party Transactions: Significant purchase and sales transactions with associates of the controlling shareholder, including Wolong Electric Group, ATB Tamel S.A, and others. Management fee income and license fee income from related parties continued.
- No Asset Revaluations or Divestments: No mention of asset revaluation, divestment, IPO, fundraising, or asset sales during the period.
- No Interim Dividend: Consistent with prior practice, no interim dividend was declared.
Macroeconomic and Industry Commentary
Management noted persistent challenges from global tariff uncertainties, especially impacting the US market, and ongoing supply chain disruptions due to geopolitical and macroeconomic factors. Freight rates and shipping costs remain elevated. The group is positioning itself to benefit from trends in digitalisation, renewable energy, and energy-efficient solutions, especially as global industry and policy focus shifts toward sustainability.
European markets, especially Germany, could benefit from increased defense spending and fiscal stimulus in the medium-term. The US market may see price increases, squeezed margins, and weaker demand as tariffs bite. Service and construction sectors may be indirectly affected via inflation and lower household incomes.
Outlook
- Near-Term: The group expects more clarity on tariffs as 2025 progresses and anticipates a potential pick-up in global industrial activity in the second half, subject to macroeconomic developments.
- Strategy: Continued focus on supply chain resilience, cost management, and aligning product offerings with energy efficiency and digitalisation trends.
- No Dividend: As is customary, no interim dividend has been proposed for 1H 2025.
Conclusion
The overall financial performance of Brook Crompton Holdings Ltd. for the first half of 2025 appears neutral to slightly weak. The company demonstrated resilience in gross margins and balance sheet strength, but faced headwinds from declining sales, increased operating costs, and lower other income. The group remains cash-rich and well-capitalised with a healthy current ratio. Management is proactively responding to tariff and supply chain challenges and is positioning for a possible recovery in the second half of the year. Investors should watch for further macroeconomic clarity, especially regarding tariffs and global industrial demand, which will likely be key determinants of future performance.
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