Key Facts and Summary

• Financial Year: This report covers the financial year ending 30 June 2024.
• Revenue and Profitability: The Group’s revenue decreased by 9.3% to $78.4 million for FY2024, while pre-tax losses amounted to $5.7 million.
• Gross Profit: The gross margin declined from 52.2% in FY2023 to 48% in FY2024. This was due to lower sales and a more promotional approach to reduce inventory.
• Borrowings and Cash Flow: Gross borrowings increased to $14.0 million as of 30 June 2024, up from $13.5 million in the previous year. However, the Group managed a positive cash flow of $7.7 million from operating activities.
• Share Performance: Basic loss per share was (0.52) cents compared to 0.30 cents in FY2023.
• Dividends: The report does not mention any declared dividends for the year.

Notable Key Points for Investor Actions

• Restructuring and Cost Management: F J Benjamin has restructured backend services by moving several functions from Singapore to Malaysia, leading to cost savings. Additionally, they closed stores in Singapore due to rising rental and labor costs.
• Inventory Adjustment: The company has adjusted forward purchases to better match the current business environment, aiming to reduce inventory in the coming months.
• Market Challenges: Weaker consumer sentiment, geopolitical tensions, and reduced tourism spending have contributed to the company’s lower revenue. The strength of the Singapore dollar also encouraged outbound travel and spending.
• Expansion Efforts: Despite the challenging environment, the Group is exploring growth in the food business through its Avenue On 3 Café and continues to pursue synergetic business opportunities to expand its retail portfolio.

Special Actions to Improve Profitability

• Restructuring Operations: Moving backend services to Malaysia and closing underperforming stores to reduce costs.
• Strategic Focus on Branding: Continued representation of brands that are relevant in the market, while exploring new business opportunities.

Recommendations for Investors

• For Current Stockholders: If you are currently holding F J Benjamin stock, hold your position. The company has taken steps to manage costs, restructure operations, and is adjusting inventory for future improvements. However, keep an eye on the company’s ability to reduce debt and improve profitability in FY2025.
• For Potential Investors: If you are not holding this stock, it may be prudent to wait before investing. The company’s financial performance in FY2024 has been challenging, with no clear dividend incentive. Monitoring improvements in profitability and sales recovery in the next few quarters would be wise before entering.

Disclaimer
This recommendation is based on the financial performance as outlined in the FY2024 Annual Report. It does not consider individual financial circumstances, and investors are advised to conduct further research or consult a financial advisor before making investment decisions.