VALUEMAX Group&rsquo s significant loans and borrowings of S$610.5 million in the 2022 financial year caught the attention of the Singapore Exchange Securities Trading (SGX-ST), which asked why this increased by S$167.9 million from the previous FY.

 

The rise in loans and borrowings were reported earlier this month, against a 16.8 per cent drop in its earnings for the second half of 2022 to S$19.2 million, from S$23.1 million in the corresponding period in 2021.

 

Addressing its queries on Wednesday (Mar 15), the mainboard-listed company said the loans and borrowings were taken to mainly finance its pawning and moneylending businesses.

 

The loan books relating to these businesses &ldquo increased significantly&rdquo in FY2022 from the previous year as reflected in the increases in segment assets of S$45.6 million and S$146.5 million respectively, it added.

 

ValueMax reported a net cash outflow from operating activities amounting to S$163.4 million. It was asked to justify why it was unable to generate net cash inflow from its operating activities despite its net profit position for the financial year.

 

The company, which also sells and trades jewellery and gold, again cited its moneylending and pawnbroking business segments. 

 

Noting that they generate interest income from loans granted to customers, it said the trade receivables will increase as these two business segments grow. The result is an outflow of working capital, it stated.

 

Notwithstanding this, ValueMax pointed out that the group generated a cashflow from operations before working capital of S$74.2 million in FY2022, versus S$62.4 million in FY2021.

 

ValueMax then addressed the group&rsquo s cash and cash equivalents of just S$6.3 million.

 

Asked how the company intends to fulfil its significant payment obligations in the next 12 months, it said it has banking facilities to do so.

 

At its disposal is a S$100 million multi-tranche unsecured commercial paper facility programme and a S$300 million multicurrency medium term note programme if these avenues have to be tapped on, ValueMax added.

 

The company also said it only maintains &ldquo sufficient&rdquo cash and cash equivalents to meet its daily cash management needs, so as to minimise financing costs.

 

VALUEMAX Group : T6I 0% on Wednesday (Mar 1) reported earnings of S$19.2 million for the second half of 2022 ended December, down 16.8 per cent from the net profit of S$23.1 million in the corresponding period in 2021.

 

Revenue for the period was down 7.1 per cent at S$133.6 million from S$143.9 million. 

 

Topline contributions from the group&rsquo s retail and trading of jewellery and gold business declined by S$17.3 million during H2. 

 

This was, however, partially offset by higher revenue contributions from the company&rsquo s money lending business and interest income from pawnbroking business, which saw revenue rise by S$4 million and S$3 million respectively.

 

Cost of sales for H2 came in 10.7 per cent lower at S$93.9 million chiefly due to a decrease of S$16.8 million in cost of goods sold for retail and trading of jewellery and gold business, in line with the decline in revenue. 

 

This was partially offset by the increase in interest costs of the pawnbroking and money lending businesses of S$2.2 million and S$3.4 million, respectively.

 

For the full year, ValueMax&rsquo s earnings rose 7 per cent to S$44.4 million from S$41.5 million. Revenue for the year was up 4.2 per cent at S$287.1 million. 

 

The board of directors at ValueMax has proposed a final dividend of S$0.02 per share, up from the final dividend of S$0.0188 per share in the prior year. The book closure and payment dates will be announced at a later time, the company said.

 

In its outlook statement, ValueMax noted that gold prices may continue to remain volatile amid the likes of rising interest rates, the war between Russia and Ukraine, as well as geopolitical tensions. 

 

The group said it will continue to explore acquisition opportunities and suitable locations to grow its network of pawnshops and retail outlets, and expand its moneylending business. 

 

&ldquo The group will consider and assess potential value propositions in relation to its associated companies, including fundraising, capital market, joint venture and/or merger and acquisition opportunities, subject to macroeconomic and market conditions,&rdquo it added. 

MAINBOARD-LISTED companies ValueMax Group : T6I 0% and GSH Corp : BDX 0% on Friday (Dec 16) individually announced fundraises through the issue of digital securities to be listed on fintech platform ADDX.

 

ValueMax raised S$45.14 million in gross proceeds from the issue of its three-month Series 005 commercial paper. Three family members of ValueMax executive chairman Yeah Hiang Nam had subscribed for 21.2 per cent of the issuance.

 

They are his wife Tan Hong Yee, and sons Yeah Chia Wei and Yeah Chia Kai, who had subscribed for S$7.66 million, S$1.6 million and S$300,000 respectively. Yeah Chia Wei is the company&rsquo s chief credit and risk officer, while Yeah Chia Kai is chief executive officer.

 

In a separate announcement, GSH announced that it has raised S$22.12 million in gross proceeds across three issuances of digital securities. Executive chairman Sam Goi, CEO Gilbert Ee and non-executive director Juliette Lee subscribed for S$13.36 million, or 64.05 per cent of one of the three issuances.

 

The digital securities to be issued by ValueMax and GSH will be listed on the ADDX platform on Dec 19. Shares of ValueMax closed flat at S$0.335 on Friday GSH was also unchanged at S$0.165.

ValueMax has reported earnings of $25.2 million for the 1HFY2022 ended June, 36.8% higher than earnings of $18.4 million in the same period the year before.

 

The earnings growth was due to higher revenues from the group&rsquo s retail and trading of jewellery and gold business, pawnbroking and moneylending business.

 

As a result, total revenue for the period increased by 16.6% y-o-y to $153.4 million.

 

Gross profit increased by 16.7% y-o-y to $42.5 million, with a 0.1 percentage point y-o-y increase in gross profit margin (GPM) of 27.7%.

 

Share of results of associates increased by 23.8% y-o-y to $2.6 million due to higher contributions from the group&rsquo s associated companies in Malaysia.

 

Earnings per share (EPS) stood at 3.6 cents on a fully diluted basis.

 

As at June 30, cash and cash equivalents stood at $47.2 million.

 

No dividend has been recommended for the period.

 

Looking ahead, the group sees gold prices remaining volatile amid a further increase in interest rates. It adds that it continues to face a &ldquo challenging business environment&rdquo with a significant increase in financing cost, as well as higher operating costs and intensifying competition.

 

In addition, the group says it will continue to explore acquisition opportunities and suitable locations to grow its network of pawnshops and retail outlets, as well as grow its moneylending business.

 

Pawnshop chain ValueMax Group plans to launch a $100 million commercial paper facility programme entirely in digital securities.

 

The commercial paper, a form of unsecured short term debt, will be listed on the ADDX digital platform.

ValueMax targets for the first tranche of digital securities under this programme to be issued by end of the year. 

Taurus Point Capital, an exempt corporate finance adviser, has been appointed to assist the listing.

 

ValueMax says it expects to raise some $41.7 million through a one-for-five rights issue to shareholders. The rights issue, shares the group, is meant to strengthen the group&rsquo s financial position and capital base.

 

In a statement dated April 13, the group says it is presently exploring &ldquo alternative means of fundraising&rdquo in addition to external borrowings and issuing debt instruments to boost the group&rsquo s balance sheet.

 

The group, on the same day, says it is proposing to undertake a non-renounceable non-underwritten rights issue of up to 116.4 million new ordinary shares in the capital of the company.

 

For every five existing ValueMax shares, shareholders are entitled to subscribe to one rights share at an issue price of 36 cents per rights share.

 

The issue price represents an 8.116% discount to the volume weighted average price (VWAP) of 39.18 cents per share for shares traded on the mainboard on April 9, which is the full market day on which the shares were traded immediately before the announcement.

 

The price also represents a 6.856% discount to the theoretical ex-rights price of 38.65 cents per share, which is the theoretical market price of each share assuming all the rights shares are issued.

 

Should all 116,401,122 shares be issued, ValueMax&rsquo s total issued and paid-up share capital will increase from 582,005,613 to 698,406,735 shares.

Yeah Holdings, a controlling shareholder of the company, which holds 375.5 million shares, representing 64.52%, will be providing an irrevocable undertaking in the company.

 

Assuming that the group&rsquo s shareholders subscribes for its pro rata entitlement to the rights shares and none of the excess rights shares, Yeah Holdings will hold about 68.58% of the ValueMax&rsquo s total voting rights.

 

Yeah Holdings is 70%-owned by ValueMax&rsquo s managing director and CEO Yeah Hiang Nam and his wife Tan Hong Yee 10%-owned by ValueMax&rsquo s executive director Yeah Lee Ching and 10%-owned by yet another executive director of ValueMax, Yeah Chia Kai.

 

Homegrown pawnshop chain ValueMax Group has reported earnings of $33.9 million for the FY2020 ended December, 33% higher than earnings of $25.5 million a year ago.

Revenue for the year grew by 17% y-o-y to $276.1 million due to higher revenue from retail and trading of pre-owned jewellery and gold businesses increased by $40.7 million due to the higher gold prices during FY2020.

 

The higher figure was mitigated by a decrease of $0.5 million from the group&rsquo s moneylending businesses. Revenue from its pawnbroking business remained stable.

 

FY2020 gross profit increased 10.4% y-o-y to $59.8 million due to higher cost of sales during the period, while gross profit margin (GPM) fell to 21.7% for FY2020 from 23.0%.

Other operating income doubled to $7.7 million from $3.8 million due mainly to the increase in government grants and rental reliefs.

 

Share of results of associates increased 42.2% y-o-y to $5.5 million due to higher contribution from the Malaysian associated companies.

 

As such, profit before tax for the FY2020 increased 29.3% y-o-y to $40.4 million.

Earnings per share (EPS) for the FY2020 stood at 6 cents on a fully diluted basis, from 4.68 cents the year before.

 

A final dividend of 1.80 cents per share has been declared for the FY2020, higher than the 1.61 cents per share declared in FY2019.

 

As at end-December, cash and cash equivalents stood at $11.1 million.